With the recent revelations of the Steinhoff scandal, Sleepy’s, a mattress chain under the company has lost more than fifty percent (50%) of their value following the resignation of its chief executive. Former CEO of Steinhoff International, Markus Jooste has lead Steinhoff International for almost 20 years and managed its expansion from a South African furniture firm to one of the world’s largest firms for selling household goods. Recently, he had opted for resignation almost immediately after discovering the accusations of suspected corruption within the company’s account books.
In 2016, Jooste saw potential in acquiring Sleepy’s, a mattress firm as a strategic move in penetrating American markets. This acquisition, which was finalized at a total of 2.4 billion euros dollars in the same year had stunned many analysts as it seemed like a poor prospect for profitability due to previous market disruptions by startups. In regards to this, Steinhoff also suffered high costs for contract termination with Tempur Sealy, a mattress maker. The furniture retailer has continued to delay announcements for results until further notices since then. Steinhoff has gained bad press left and right after investigations by the German state prosecutor concerning suspected accounting irregularities that took place in 2015. These prosecutors in Oldenburg, Germany, who has authority over Steinhoff’s Frankfurt headquarters will be ones to watch in terms of any results from probing the accused firm.
In response to the accusations, Steinhoff news has been oriented around defending themselves, initially denying all accusations against the firm, and later assuring that their profits were taxed correctly and associated revenues were booked correctly. The South African arm of the auditing firm, Deloitte has been under fire for verifying the legitimacy of the values. To this day, it remains unclear the specific irregularities that caused an uproar in the International news.