Steinhoff seeks European growth as stock makes Frankfurt debut

South African furniture retailer Steinhoff International Holdings NV switched its primary listing to Frankfurt Monday, reflecting Europe’s increasing importance to the company.

The stock opened at 5 euros and rose to 5.085 euros at 1:56 p.m. in the German city, giving the company a market value of 19.6 billion euros ($21.2 billion). In Johannesburg, where Steinhoff now has a secondary listing, the shares climbed 3.2 percent.

After a period of expansion, the company now gets more than half its sales in Europe, where it has operations in the U.K., France and Germany. Steinhoff has switched its headquarters to Amsterdam from Johannesburg, and its main focus is to expand its brands into territories adjacent to its existing operations, particularly eastern Europe.

“That’s where our focus is lying at the moment, rather than looking at acquisitions,” Chief Executive Officer Markus Jooste said by phone on Monday.

Steinhoff’s European sales gained 6.4 percent in the 12 months through June. The company is also seeking to become one of the world’s biggest discounters after buying Pepkor Holdings Pty Ltd. last year.

The Frankfurt listing was a “very emotional moment for the Steinhoff family, coming from Germany, and a high point in the history of the company,” Jooste said.

Bruno Steinhoff founded the company in 1964 in the German town of Westerstede. In 1997, the Steinhoff family acquired a stake in South African furniture company Gommagomma Holdings Ltd. and the following year the merged entity listed on Johannesburg’s stock exchange under the name Steinhoff International Holdings Ltd. The Johannesburg-traded stock has climbed 33 percent this year.

“We’ve been delighted by the interest of various foreign shareholders from both Europe and America,” Jooste said.

The Johannesburg-listed stock fell 7.2 percent on Dec. 4 after German prosecutors said the company is being investigated for possible accounting violations.

German authorities searched offices in Westerstede on Nov. 26, the company said in a statement Friday. They also visited some private homes as prosecutors in Oldenburg investigate four current and former managers, Frauke Wilken, a spokeswoman for the prosecutors, said by phone the same day, without naming the people. Steinhoff hasn’t heard what allegations German prosecutors may make, Jooste said.

 – Bloomberg