Group revenue fell from EUR 5.1bn in Q3 2016 to EUR 4.8bn in the equivalent quarter of 2017.
The firm claims to be the world’s second largest furniture and home goods retailer. Its European operations are integrated from bed and furniture production through to retail.
Steinhoff owns high street bands such as Conforama in France, and Harveys and Bensons for Beds in the UK. In the US, it has owned Mattress Firm since September 2016.
Sales at Mattress Firm dropped by 10% between the 2016 and 2017 quarters. This was largely driven by lower average unit selling prices. ‘Like-for-like unit sales for the group declined 3%,’ Steinhoff said.
Mattress Firm’s figures reflect the impact of ending a long-standing supply agreement with Tempur Sealy.
It has replaced this with a 5-year relationship with SertaSimmons, the US’s largest mattress maker.
The trading statement contained an open letter from Steinhoff acting chair, Heather Sonn.
She said: ‘Much has gone wrong at our company. The resignation of former CEO Markus Jooste on 5 December 2017 following the revelation of accounting irregularities has had a profound impact.’
She said Steinhoff has weathered the short-term liquidity crisis that this triggered. The company did this by selling non-core assets and refinancing debit.
Jooste was reported to the South African government on suspicion that he committed an offence under the country’s Prevention and Combatting of Corrupt Practices Act 2004.
Sonn confirmed that PwC is continuing a forensic investigation into the company’s accounts.
She added: ‘Although early in the investigation, it appears that the accounting irregularities relate largely to the group’s central European business… a key focus is off-balance sheet structures and transactions, including those with closely related structures.’
These could have led to over-stated revenue and assets in part of the group as well as profit.
‘A number of loans, investments and historical cash equivalents… in the region of EUR 6bn is being investigated,’ Sonn added. The results of these investigations will have an impact on financial statements for 2017, and restatement of the 2015 and 2016 financial statements.
It is not clear when it will be possible to produce those, she added.