Mass management walkout under way at Star’s Tekkie Town
By Warren Thompson - Jun 27th 2018, 10:00
The crisis of leadership created at Steinhoff Africa Retail (Star) subsidiary Tekkie Town following the immediate resignation of its CEO and chief operating officer appears to have been compounded, following news that a raft of senior managers have resigned as well.
Tekkie Town CEO Bernard Mostert, who is also the CEO of the speciality fashion and footwear division, announced his resignation following what he termed a “hostile” and “personal” campaign to undermine him by Star’s leadership team, led by CEO Leon Lourens. Mostert was joined by his right-hand man, Dawie van Niekerk, the divisional chief operating officer.
"It has become completely impossible for us to manage the business in a way that is true to our own personal values and the performance we have and would like to deliver," Mostert said.
Mostert confirmed the relationship with the rest of the Star executive came under stress as animosity developed between the Star senior leadership and Braam van Huyssteen, the founder of Tekkie Town. Earlier in 2018, Van Huyssteen resigned from his position as chairman of the property and speciality divisions at Star over a dispute with his employment contract.
"The main reason we are walking away is because of the exceptionally hostile and personal campaign the Star hierarchy have waged against Dawie and myself in order to undermine us, just by virtue of our association with Braam [van Huyssteen]. It was abundantly clear to us that the whole process unfolding between them and Van Huyssteen was an agenda to settle a personal score and we always wanted to avoid that."
According to an employee relationship manager at Tekkie Town, who herself resigned with immediate effect on Monday, 57 employees had resigned as of Monday evening. These included virtually all of the company’s regional managers and “most” of its area managers.
She cited the reasons for her resignation as “a conscious decision in support of Braam, Bernard and Dawie. Tekkie Town is who we are, its people and culture.”
While solidarity of colleagues is one thing, being able to support oneself and a family financially is entirely another. Given that Van Huyssteen has publicly indicated he is considering launching a rival to the business he founded and sold to Steinhoff, Business Day asked him whether the resignations were an implicit or explicit undertaking to employ those who decided to leave.
Van Huyssteen denied he had offered anyone a job, and likened the situation to “day zero” in Cape Town. He sees it as his patriarchal responsibility to look after what he calls his “extended family” until such time as he has no money left to do so.
“When Braam van Huyssteen has no more cash to give anyone, that is when it will be day zero for my colleagues. I have enough money to look after them for a couple of years, but I will not employ them. I may do so at some point in the future, but if or until that day comes, I will make sure I put bread on the table for them.”
"Our guidance and advice to them regarding how the situation could be amicably handled was not taken into account. In fact, they deliberately did the opposite, with the result that it has now started to affect the business. Dawie and I both share the view that you do not accept a pay cheque from someone you do not trust and who [does] not have the best interests of the business at heart."
The previous owners of Tekkie Town have been at loggerheads with Steinhoff and Star since January, as they watched the value of Steinhoff shares plummet in the wake of accounting irregularities. They had received payment for the acquisition of Tekkie Town by way of Steinhoff shares, which included a lock-up period of a number of years, which precluded them from selling their shares.
In addition, Mostert and Van Huyssteen brought an application in the Western Cape High Court a few weeks ago requiring Star to recognise and reinstate the terms of a bonus scheme they say was agreed to by Steinhoff at the time of the acquisition, a position that appears to have been reversed by Star in 2018. Van Huyssteen had previously attributed the strong performance of the speciality division in Star’s interim numbers to the existence of the bonus scheme, which had motivated the management team.
When asked if the two would be joining Van Huyssteen to start a rival to Tekkie Town, Mostert said: "At this stage, we are going to take time out and assess our options. It’s been exhausting being caught in the middle of this unfolding fight, and we are not going to take any decisions in the short term."
Star earlier provided the following statement to the news Mostert and Van Niekerk had resigned: “Star regrets to advise the resignation of Bernard Mostert, the CEO of Tekkie Town, and certain other senior members of management, with immediate effect. In consequence of this, an interim management team led by Riaan van Rooyen (currently the operational director at Ackermans) has been deployed."
“Tekkie Town is an important part of Star, and further support will be provided to Tekkie Town, as required, through Star’s extensive operational capability. Tekkie Town will continue operating business as usual,” Star said in the statement.
“Tekkie Town operates 368 stores within Star’s total retail footprint of more than 5,100 stores and contributes approximately 3% to Star’s consolidated annual revenue.”
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