Steinhoff recruits retired KPMG partner to help with restructuring

In order to navigate its way through a prominent accounting scandal, while attempting to maintain its status as the largest retailer in South Africa, Steinhoff International has appointed a new Chief Restructuring Officer in the form of Richard Heis. The former Head of Restructuring at KPMG has over two decades of experience in restructuring.

In many ways, the retail sector in South Africa has emerged as the flagship industry of the country in recent years. The oil sector has faltered after oil prices fell, then the mining sector was shaken by a dip in gold and platinum prices. The retail sector, however, has registered a steady 5% growth rate over the last two years.

At the helm of this sector, well ahead of its competitors, has been Steinhoff International. The South African firm registered revenues of just over $13.5 million in 2016, and currently operates in 31 countries across the world. Since its establishment in Stellenbosch in 1964, the firm has grown to global prominence, having been acknowledged as the 68th biggest retailer in the world by Big Four professional services firm Deloitte.

The firm’s revenues were well above its local competitors such as Shoprite and the SPAR group, which registered revenues of just over $10 billion and $6 billion respectively, and placed 94th and 156th on the global list. However, this was before a spanner was thrown in the works late last year.

In what is being regarded as one of the largest accounting scandals in South African history, the firm allegedly over-stated revenue and profits on their balance sheets. More than $6 billion in assets were reported to have raised alarm, plunging the firm into a sea of scandal, and killing 85% of its market value.

Since early this year, the firm has regained what little stability it could, and the time has come to rebuild. To this end, the firm has appointed Richard Heis as its Chief Restructuring officer. Prior to joining Steinhoff, Heis has spent his entire professional career at Big Four professional services firm KPMG.

He was first recruited by the firm in 1983 as a consultant, following which he gradually ascended through the ranks, eventually being awarded the position of Partner more than a decade later in 1997. As a specialist in insolvency and restructuring, Heis worked on a range of assignments with clients from all over the world as the firm’s Global Head of Restructuring.

In addition, Heis was appointed a non-executive member of KPMG’s UK Board, and is currently a Director at Insol. The striking part about his appointment to Steinhoff is that the highly experienced professional announced his retirement when he left KPMG late last year.

Commenting on his appointment, Acting Chairperson at Steinhoff, Heather Sonn said, “We are delighted that Richard has agreed to join the group at this critical time and we are sure that his expertise and experience will bring significant benefit to the group as Steinhoff develops a plan to address the group’s financial indebtedness.”