Newsmaker
Tekkie Town founder out to make Pepkor old boys’ club pay
Braam van Huyssteen out to make Pepkor old boys’ club pay
● Tekkie Town founder Braam van Huyssteen, whose acrimonious resignation from Steinhoff Africa Retail sparked a walkout of senior management and staff from the discount footwear retailer — a whollyowned subsidiary of the group — says he intends starting a rival Tekkie Town.
“I want to start over again. I want nothing to do with these people,” he says, referring to “the Pepkor old boys’ club” that runs STAR.
STAR bought Tekkie Town from Steinhoff for R3.4-billion. It has been the best performer in its struggling speciality fashion and footwear division, which Van Huyssteen led, but he says it will go nowhere now.
“It’s a car without an engine.”
He says hostility between him and the Pepkor leadership started after Steinhoff CEO Markus Jooste bought Tekkie Town in 2016 for R3.2-billion.
“When we got purchased after I met Jooste through my racing connections, I was seen as another find of Jooste’s.”
The Pepkor brass would ask, sneeringly: “How’s that deal you did on the racecourse doing?”
He says: “They made it very clear they were not fans of Tekkie Town. Because they’re selling cheap underwear and kiddies’ clothing, and we’re selling branded footwear, world-renowned brands.
“They rubbished our business from the outset. They said it’s a rubbish business.”
Pepkor’s speciality fashion and footwear division was losing hundreds of millions of rands, and Jooste wanted him to fix this by amalgamating Tekkie Town with the Pepkor speciality brands.
The attitude of Pepkor was that they didn’t need Jooste to tell them how to run their business.
The idea was shelved but revived, with Van Huyssteen in charge, when the African assets of Steinhoff were restructured into STAR.
Pepkor executives were hugely resentful but there was nothing they could do because Steinhoff, still in good standing, was the majority owner of STAR and called the shots.
But when “the bomb dropped” and Steinhoff collapsed, Pepkor moved to get rid of Van Huyssteen.
“They told me they know I’m a fantastic entrepreneur but they don’t think I fit into the corporate space so well. They tried to convince me to go my own merry way.”
They’re also contesting a performancerelated “earn-out agreement” he had with Jooste, which, he says, is worth more than R800-million.
He’s taking them to court even though the issue will be academic because without him and his management there will be no performance, he says.
Van Huyssteen became chairman of STAR’s property division in October after he pointed out Pepkor property failures to Jooste and Christo Wiese.
This caused “considerable bad blood” between him and the Pepkor leadership.
“They told me that the property people were uncomfortable with my aggressive way of doing the business. I pointed out all their rubbish leasing deals.”
He says the Pepkor old boys’ club running STAR made it clear that “anything that is not Pepkor they want to get rid of and will go out of their way to do so”.
This is why 100 Tekkie Town managers — “and that number is growing so fast I can’t keep track of it” — have walked out, something Van Huyssteen denies having anything to do with.
He says he walked because Star CEO Leon Lourens “unilaterally removed me as the chairman of properties and kicked me off the executive committee”.
He feels this amounted to constructive dismissal, which, according to legal opinion, makes it impossible to enforce his three-year restraint clause.
It makes nonsense of attempts to invoke restraints of trade to prevent him from starting another Tekkie Town, he says.
“They’ve delivered restraint letters to all the management, which we will answer because we believe it’s rubbish. They will not stop us.”
He has also given them notice to vacate the warehouse and offices in George that are the headquarters of STAR’s speciality division. “They belong to me and I need them for Tekkie Town 2.”
Van Huyssteen is incensed by Pepkor's attempts to enforce a secret R500-million guarantee to cover the losses executives incurred when the Steinhoff collapse left them with worthless share options.
The money will come from shareholders already battered by the Steinhoff collapse, who were kept in the dark, he says. “Nothing of this was disclosed.”
At the first meeting of the executive committee after the Steinhoff collapse the main topic of discussion was how to recover their losses, he says.
“They were worried about their bonuses and increases.”
Van Huyssteen, 53, sold Tekkie Town to Jooste in 2016 for R3.2-billion, and lost it all when Steinhoff collapsed and the Steinhoff shares he’d received as payment became worthless.
He’d built it from a small surf shop he ran with his father in Mossel Bay, into a company with 368 outlets around South Africa.
In 2014, he sold, “thank God”, 43% to private equity firm Actis for R728-million. As a 90% shareholder, he pocketed most of it.
He met Jooste in early 2015 soon after the Actis transaction. Jooste wanted to know his plans for Tekkie Town.
He said he was taking it north into Africa. “Don’t talk to me about Africa,” he says Jooste said. “Africa is rubbish.”
Instead, he took him to Poland, where Steinhoff had a strong presence, to see if he could replicate Tekkie Town there.
Van Huyssteen saw “a massive opportunity”, and sold.
How closely did he investigate Steinhoff before agreeing to be paid out in Steinhoff shares? Did he do a proper due diligence?
“What more must I do than follow Dr Wiese, who’s got R60-billion invested there? Who am I? He’s been round the block how many times?”
He refuses to condemn Jooste.
“I’m not saying he was innocent. I just want to see the evidence of what he did,” he says.
“He bought my business. Did he buy a rubbish business? He asked me, could I grow the business? Did I do it? Yes, I did.
“That will change very quickly now because there’s no engine to run the car any more.”
They’ve delivered restraint letters, which we will answer because we believe it’s rubbish. They will not stop us