Following their purchase of the Homestyle Group in the UK, Steinhoff International faced a major challenge with the property portfolio they had inherited.
The furniture, beds and homewares retailer had expanded over several years through the acquisition of established companies as well as growing organically. The portfolio comprised six trading fascia’s, and a total of 35 companies in which leases were held. Typically for the period, they were for 25 year terms with no breaks, and 5 year upward only rent reviews on a full repairing and insuring basis. Many of the 450 stores were situated in sub optimal locations and frequently the group held more than one lease on the same scheme.
As Group Property Director, I devised a strategy to streamline the portfolio through surrendering leases for premiums, taking advantage of lease events to relocate stores to better locations, and corporate restructuring to liquidate dormant companies holding leases.
Delivery of the plan took around 7 years, but on completion the group had successfully divested 120 properties, received over £30m in surrender premiums, saved future lease commitments of £70m and was trading from significantly improved locations on prime retail parks.