Tekkie Metropolis’s co-founder and ragged CEO, Bernard Mostert, sat down with BizNews founder Alec Hogg on the third BizNews Conference within the Drakensberg earlier this month. In 2016, Steinhoff bought Tekkie Metropolis from founder Braam van Huyssteen for R3.2bn; paying with Steinhoff shares that imploded the following yr. Mostert spread out, sharing the bits and bobs of South Africa’s finest company fraud scandal.
Bernard Mostert on the establishment of Tekkie Metropolis and his family to the founder
Braam founded Tekkie Metropolis and, for loads of years, till 2013, he used to be the only proprietor of the alternate. He borrowed R20,000 from his mother on the age of 23 and opened a store in Mossel Bay, which used to be a overall sports activities store. I grew up in Mossel Bay and met him that yr on the age of 13. I beget repeatedly cherished golf because it has opened a great deal of doorways for me in my existence. I played for the metropolis’s golf team then. How it labored within the Southern Cape is that you just’d play foursomes within the morning in pairs and singles within the afternoon. Most fascinating decades later, I realised what a probability and what a schlep it used to be for adults to beget adolescents in golf teams… Nonetheless Braam took me in and we played collectively for loads of years. My of us relied on him to come advantage and collect me up at our home on a Saturday morning and journey off to Plettenberg Bay and Riversdale and plunge me off over again at eight o’clock at evening. That is where our relationship started but it used to be simplest in 2011 that I joined Braam. He invested in a alternate that I attempted to get off the ground in 2006. In 2009, he said to me: “Listen, I will sight you’re making an try in actuality laborious but I’ve bought a rocket ship and a succession bid in my alternate. I mediate whereas you happen to come here, I’ll be ready to oversee you better but you’ll furthermore attain better within the long time frame.” He turned out to be appropriate. I turned section of the administration team of Tekkie Metropolis. Braam used to be the ideal director of the alternate till 2013 when I turned the diversified director.
On launching Tekkie Metropolis as a sneakers store
Braam is an distinctive retailer, specifically from a worth-relief a watch on perspective. He had built up a minute little bit of reserve and – in a myth that has been advised time and over again – made an in uncomfortable health-fated offer for 12,000 pairs of Caterpillars that used to be cancelled as an expose by Edgars. David Palmer, who to this portray day is the Caterpillar agent in South Africa, popular the offer. It used to be R100 a pair and R250 at worth ticket. He advised Braam: “You would possibly possibly also sell the sneakers anyplace rather then where Edgars is.” So, Braam sent a gross sales force or web explain online visitors into the rural areas and, three weeks later, all of the sneakers were bought and he realised he used to be onto something else. Then, in 2000 after the Christmas shopping and selling season, his mother tickled him to desert all forms of diversified sports activities equipment (cricket bats, tennis rackets and ping pong balls, and so forth.) and said: “Real take care of the sneakers attributable to clearly that’s what you’re very loyal at.” He then opened the first store within the Somerset Ticket Mart.
On Tekkie Metropolis’s Steinhoff battle
Steinhoff crossed our paths and used to be gorgeous to us. Pepkor had a basket of corporations associated to ours that used to be no longer performing optimally. The deal performed with us used to be that we’d alternate our controlling allotment in Tekkie Metropolis for shares in Steinhoff that shall be restricted for three years and our administration team would retract relief a watch on of Pepkor’s speciality. First and vital, we’d beget broken it out of Pepkor altogether as that used to be the dialogue. Then, after three years, we’d be ready to alternate our shares and Steinhoff would pay us an make-out equal to 20% of the upside we created in that speciality alternate on the last day of the yr. At that stage, we knew Tekkie Metropolis’s runway used to be roughly 550 stores within the nation. After we did the deal, we had about 220 stores in 2015. Taking stores in locations we belief were gorgeous after which putting a expose of this community of hillbillies from George guilty of a alternate and a better platform. It then goes to a seek details from about what we noticed and what we would possibly possibly possibly maybe beget to quiet beget viewed.
Markus repeatedly treated me with a great deal of admire and he used to be unfailingly well mannered. Our deal went to the board of Steinhoff, where it used to be ratified, after which Markus insisted on an interview with Christo and Braam before our deal used to be performed. One factor that came about – which I mediate has no longer been said before – is that our long-established deal used to be for R43.5m Steinhoff shares and Steinhoff would then give the liquidity to the actors. Two weeks before we were to end, we bought summoned to Stellenbosch and Markus wished to sight us. So, Braam and I tracked down there. Markus said unfortunately, he needed to pause on a particular section of our deal. It came as a shock to us attributable to we were on the verge of signing. He said it used to be simplest then that his team had introduced him the salaries of the pinnacle 5 folks within the alternate. He insisted we decrease the acquisition ticket by 500,000 shares attributable to he wouldn’t be ready to change the management with salaries at that ticket. He boxed Braam and me staunch into a articulate where we bought higher salaries but fewer shares. That used to be an fascinating factor to me attributable to we time and over again beget this in sort myth that he appropriate overpaid and used to be happy to get anything else at this form of ticket. Nonetheless then you definately had a 2d esteem that.
Read furthermore:
- Bernard Mostert on Steinhoff as court docket grants embroiled retailer journey away to allure
- The Immense Steinhoff settlement debate – Piet Viljoen and Bernard Mostert
- ‘We proceed to battle for what’s appropriate and we belief the system’ – Bernard Mostert on the Steinhoff settlement saga
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Narration by Alec Hogg
