New Look Is Hard To Escape Because Of The Scandal Of His Boss.

Butterfly Effect in the UK high street brand New Look Group Ltd. shows that after China's radical expansion of the company plunged the company into the abyss, its South African billionaire boss, Christo Wiese, was trapped by financial scandals, and its wealth rapidly shrank by billions of pounds.

According to the world clothing and shoe net, in the past two weeks, Christo Wiese's John castle and Frankfurt listed company Steinhoff International Holdings NV (SNHJ.J) have fallen into a financial scandal of inflated revenues and profits. The company's market value evaporated 10 billion dollars, and its share price plummeted from 5560 Rand in early June to 803 on Friday. South African rand, the stock price of depository shares in Frankfurt dropped from 3.5 euros to 0.55 euros, and both of them lost more than 80%. At the same time, Christo Wiese and his son Jacob Wiese resigned as chairman and director of the group respectively.

On Friday, Christo Wiese also halted a related spanaction of its holding company, announcing that the termination of Shoprite Holdings Ltd. (SHP.J) and Steinhoff spanactions. In August of this year, Steinhoff Steinhoff Africa Retail, a South African subsidiary, attempted to acquire Shoprite's controlling stake at the price of 35 billion 500 million South African rand, or about US $2 billion 680 million.

For fear of Christo Wiese's solvency, the investment bank has sold 98 million 400 thousand shares of Steinhoff shares, including Christo Wiese's pledge fund for last year's $1 billion 600 million financing. In 2016, Christo Wiese financing increased 628 million shares of Steinhoff shares, or about 15% of the latter. Citigroup Citigroup, Goldman Sachs Goldman Sachs, HSBC HSBC and Nomura Nomura Securities for financing Christo Wiese may be involved in risks.

After some cash in the bank, Christo Wiese's holdings of Steinhoff decreased from 22.8% to 20.5%. Obviously, this is not the final outcome. The second largest shareholder of Steinhoff is the national security fund of South Africa. The fund may take political intervention to seek the sale of Steinhoff.

At present, Steinhoff has a liquidity gap of $2 billion. However, Steinhoff Africa Retail, a subsidiary, said it would repay 1 billion 200 million dollars in debt. Meanwhile, the company complements liquidity with AlixPartners and has sold about 9.5% of its shareholding PSG Group (PSGJ.J) on Friday to reduce its holdings to 16% and raise 4 billion 700 million of South African Rand.

In addition to the German authorities' investigation of the Steinhoff, the independent audit committee of the South African authorities said on Friday that it is investigating the Steinhoff's auditing body, Deloitte South Africa, DDT South Africa. In recent years, DDT has repeatedly fallen into financial fraud scandals in big companies.

At present, the Steinhoff board of supervisors has hired KPMG PwC to conduct an independent review of the accounts of the company in the past three years.

New Look boss, South African tycoon Christo Wiese

The financial scandal of Steinhoff has also caused great concern to the British retail market, because over the past few years, the South African tycoons have been borrowing heavily to buy British retailers, including Poundland and Benson for Beds, Harveys and New Look.

In the middle of 2015, Christo Wiese bought the New Look 90% equity of the UK high street brand through its private equity fund Brait SE (BAT.J) for 780 million US dollars, and accelerated the expansion of the group, especially in China. market The radical industry has attracted much attention.

As early as in the early days of China, Tang Xiaotang, analyst at No Agency, said she needed to be vigilant against New Look. In China's increasingly competitive market, New Look, which lacks popularity and cost-effective, may be a good Britain. brand Drag into the mire.

The warning of analyst Tang Xiaotang finally became a tragedy on New Look. The New Look's "3 years and 500 stores" in China is not only impossible, but the brand has been in crisis this year, not only has its sales plummeted, but also it has changed from profit to loss.

Released in early November, the China Daily reported that New Look Group Ltd. recorded a 4.5% decline in the first half of the year, from 718 million 100 thousand pounds in the same period of fiscal year 2017 to 686 million pounds. The group's brand name could be 8.6% more than the sales slump, of which the British market was down 8.4%, and the self operated e-commerce business also recorded a 7.6% decline. In the first half of the fiscal year, the UK high street brand group continued operating business profit loss of 10 million 400 thousand pounds, a profit of 59 million 300 thousand pounds in the same period last year, and a loss of 72 million 700 thousand pounds after the mid term tax.

New Look chairman Alistair McGeorge

At the same time, the New Look group's former executive chairman, Alistair McGeorge, joined the group. Alistair McGeorg said that the top priority of the company in the spanformation period is to achieve stability by reconnecting with the brand customers and restoring the wide appeal of the brand to make the business return to the basics. At the same time, he said, the company's performance today shows that the company is in another difficult period when the high street retail environment in Britain is full of challenges.

New Look has gone uphill through its former CEO Anders Kristiansen, but under the leadership of Anders Kristiansen, the brand has expanded in China.

Tang Xiaotang said that Anders Kristiansen's experience in China not only did not help New Look years ago, but rather "framed" New Look, because the pace of change in China's retail market ranked first in the world.

Anders Kristiansen has served in Bestseller bestseller group as the deputy chief executive of the group's China market. However, the current retail environment, economic environment and lifestyle of Chinese consumers are vastly different from those of Anders Kristiansen in China.

Has served China's New Look CEO Anders Kristiansen before.

Jonathan Pritchard, an analyst at Peel Hunt, a London investment bank, said that everything will be sold for Steinhoff now. Nick Bubb, a retail analyst, said that under the current circumstances, cheap selling is almost unnecessary.

On Friday, Steinhoff closed 34 billion 617 million South African rand, about $2 billion 630 million, and shrunk 9 billion dollars in the past two weeks.

Steinhoff's accounting scandal also affects Brait SE, which has plunged 15% in the past two weeks, from 4788 Rand to 4047, and Christo Wiese wealth has fallen by 730 million US dollars.

However, Tang Xiaotang said that if New Look is included in the possible impairment, Christo Wiese's financial contraction will be more than that. After the acquisition of New Look by Brait SE, the latter's IPO plan was postponed. Tang Xiaotang said that the South African Volvo's wishful thinking may be through the expansion of New Look in order to maximize profits in 3-5 years of IPO, and now, everything is over.

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