Steinhoff Sales Gain on Slow Road to Recovery

(Bloomberg) -- Steinhoff International Holdings NV’s first-half sales gain gives the global retailer some wiggle room as it looks to finalize debt-restructuring talks. Still, there is plenty of uncertainty.

Steinhoff said Friday sales rose 3% in the six months through March to 6.86 billion euros ($7.7 billion). The owner of Poundland in the U.K. and Conforama in France reported its third set of earnings in as many months, following revisions to the company’s past financial statements in the wake of the late-2017 crisis.

Pepkor Europe’s discount clothing and household brands were the standout performers, with the division posting a 13% gain, mainly driven by expansion in central Europe. The stock climbed as much as 17%, heading for its biggest gain in seven months as it swung to an operating profit of 212 million euros.

Still, the company is not out of the woods. While it’s been able to keep the cash registers ringing at all of its operating divisions during a year and a half of acute financial distress, Steinhoff said the outlook for the second half is dimmer amid a tougher global economy. The retailer also cited a lengthy list of material risks to its going-concern status.

Part of its plan is to sell stakes in units to enable it to repay creditors, which have agreed on Aug. 9 as a deadline for completion of the debt restructuring. Finalizing this as soon as possible is critical for Steinhoff, which has 9.1 billion euros of net debt.

Revenue at furniture chain Conforama declined by 2%. Steinhoff plans to close 32 Conforama stores and 10 Maison Depot outlets, which may result in as many as 1,900 jobs cuts.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier, Corinne Gretler

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