The funding will be used to support Steinhoff’s UK and European businesses, two of the group’s core geographical segments along with the Pacific Rim and Southern Africa. Steinhoff Europe AG is part of South Africa-based conglomerate Steinhoff International.
In the UK, Steinhoff has evolved to become one of the largest integrated furniture retailers in the country. Since the acquisition of Relyon Plc in 2001, Steinhoff has made a number of acquisitions including the Sprungslumber mattress brand and manufacturing facilities as well as the retail operations of Homestyle Plc in 2005. The business now operates c500 retail stores across the country, including furniture specialists Harveys, beds specialist Bensons for Beds and home ware retailer Cargo. The group is continuing to make strategic acquisitions: Steinhoff recently announced the acquisition of certain operations and brands from the Hilding Anders group in the UK, which added another manufacturing plant, and the Slumberland, Myers, Dunlopillo and Staples brands to the portfolio.
Steinhoff UK has performed strongly despite the economic volatility, with like for like half year revenues growing 11% to ZAR3,067m (£220m) to 31 December 2012. The Bristol-based team at RBS CIB has supported the group since the initial Relyon transaction in 2001 and the latest funding deal involves a significant refinancing of existing debt coupled with an increase in working capital to support on-going expenditure and investment.
Philip Dieperink, chief financial officer of Steinhoff UK, said: “The integrated nature of our operations in the UK has played a pivotal role in the success of our retail business. Our bedding retail operations are supported through the value chain and include our foam and manufacturing operations situated in Wellington. We remain fully optimistic about our business in the UK and our strategic aspirations during what has been a challenging trading environment.”
Ian Bamber, senior relationship director, Royal Bank of Scotland Corporate & Institutional Banking, said: “RBS CIB has maintained a very strong relationship with Steinhoff, and we hold the management team in very high regard. This latest funding builds on this strong relationship. We are delighted that Steinhoff has continued to perform in what has been a very challenging UK retail market and we believe they are well positioned to continue benefitting from a formidable, customer-centric growth strategy.”