Steinheist. Rob Rose
a tour of the factory, pointing out pallets that were incorrectly stacked or unevenly packed, dust on the floor and any small infraction that could serve as fuel for his indignation and disgust at the quality of the management he was about to fire.” Eventually, after running out of steam, Jooste turned to the MD: “Get out of my fucking factory,” he told him. It’s a tale that illustrates the single defining characteristic about which many people agree: Markus was an epic bully.
Speaking about him today, Christo Wiese concurs Jooste was a male chauvinist, uncompromising and not shy to intimidate people. But he says that these were not red flags in themselves. If anything, they were a commendation. “That was his assertive style. But I can say I’m not aware of any of the CEOs of my companies, bar maybe one or two, who don’t have that sort of streak. It’s their way or the highway.” This is why Wiese says he has some sympathy for the executives now being blamed for not having detected Jooste’s shady goings-on. “I know how he operated – how he could intimidate people.”20
Wiese is certainly right that Jooste is far from the only exponent of strong-arm tactics in the mahogany row. One of the more famous recent examples was the pugnacious, thick-jawed Travis Kalanick, who was fired as CEO of Uber, but who had thrown his weight around to stifle all his critics.21 Dr Mary Lamia, a clinical psychologist and professor at the Wright Institute in California, says while people think bullies have low self-esteem, their behaviour is usually a response to internalised shame. “Although some people who live with shame have low self-esteem, those who behave like bullies tend to have high self-esteem and hubristic pride. They attack others to take away their shame.”22
The stories of Jooste’s swagger are legendary. Insiders say he would routinely tell his executives where they should be buying a house, what brand of whisky they should be drinking, and if any of them dared sell any of their Steinhoff shares, he’d be knocking on their door that night, asking what unfortunate event had prompted their display of disloyalty. When it came to property, for example, some of Jooste’s senior staff followed him to Val de Vie – the uber-wealthy estate nestled in Paarl in the Cape Winelands, about a forty-minute drive from Stellenbosch. Val de Vie is one of those few absurdly ostentatious places that outdo the brochures. A three-bedroom home at the estate goes for around R6m a pop, and even vacant land sells for more than R2m. But, then, perhaps that’s what you expect when your estate has its own wine cellar, coffee roastery, a Jack Nicklaus Signature Golf Course and a swimming school run by an Olympic gold medallist, Ryk Neethling. It bills itself as South Africa’s only “residential polo estate”, which tells you pretty much all you need to know.
Jooste himself had bought land – a large stand next to a bridge over the Berg River – at Val de Vie in December 2015 that set him back R10.5m. (In the wake of Steinhoff’s collapse, he sold it for R13m, paying transfer fees of R1.7m.) But other Steinhoff executives also bought into Val de Vie, bonding themselves to the hilt, some using their Steinhoff shares as collateral. Those stories ended unhappily, when Steinhoff’s share price plunged 97%, and the banks came knocking.
Socially, Jooste was never shy of belittling even his senior executives. One person relates just such a tale: “There was this dinner party, attended by all Markus’s executives. As you do, everyone brought a bottle of wine, and one of his friends bought a bottle of average MCC champagne.” (MCC, which is shorthand for Méthode Cap Classique, is pretty much the South African equivalent of bottle-fermented champagne from France. But, unlike champagne, which goes for upwards of R500, you can pick up a reasonable bottle of MCC for around R120.) “Markus immediately held the bottle up and, in a booming voice, told the other guests: ‘Nou wat se kak is dit? Wie het dit gebring?’” Only, Jooste knew exactly who brought it – the act was designed to humiliate.
Often, even at public events, he’d have no qualms about deriding people, often within earshot. “He’d point at someone nearby, and say ‘Daardie een is ’n poes’. He didn’t seem to care that people could hear him,” said another former colleague.
Christo Wiese insisted he’d never seen Markus bully people like this. “That never would have washed well with me.” But other former colleagues say Jooste would revel in deliberately shaming others – be it a board meeting or a casual dinner. “He would go out of his way to make other people feel stupid,” said Christopher Rutledge. “Maybe that played a part in what happened later, and why people were too scared to challenge him.”23 Rutledge says that behind his back, those who worked with Jooste called him “the seagull” because “he would fly in, shit all over his executives and then fly out”. This contrast – between the charming, easy-going ladies’ man and the bruiser with the short temper – ensured Jooste remained enigmatic even to those close to him. Insiders speak of his split personality, and his remarkable ability to shift from Jekyll to Hyde.
“A lot of people at Steinhoff were scared of Markus,” says one senior person who worked with him for years. “He could treat people who reported to him really badly, so many people just didn’t want to approach him for anything.” But, conversely, if Jooste needed something from you, he would flip the switch and turn on the charm. So, for example, if you were an analyst covering his company from whom he wanted a good recommendation, or someone with whom he was making a deal, or his superior, he’d treat you like a king. “In that case, he’d really roll out the red carpet. I think, in retrospect, that’s why those guys he treated so well just can’t believe he’s the guy who did all this. They couldn’t reconcile it.”
But for those who reported to Jooste, he could be a tyrant. His own executives often didn’t have the stomach to challenge him, fearing the ferocity of his ridicule. “Some people say Markus was a good leader,” says a former colleague, “but I don’t think that’s true. If your staff are too scared to tell you what’s going on, how can that make you a good leader?”
The cult of Markus was kept alive, in part, by a culture of fear. But at the time his empire was expanding, and his cohorts were making money. Everyone was making money, in fact. And so, he could get away with it.
* * *
On 23 September 1998, Markus Jooste blew the horn to begin Steinhoff’s era as a public company listed on the JSE in Sandton. It was the culmination of his and Claas Daun’s plan to stitch together Gomma Gomma and Bruno Steinhoff’s European furniture manufacturing assets under one roof. The sales pitch was that investors could now buy shares in a company that made most of its money in Europe, 82% of it actually, right from their desks in Joburg.
Jooste had finally made the big show. For the first time, the public was able to buy into his company, and the ticker symbol would appear in the stock pages of the Business Day newspaper every day. It also meant that for the first time, a wide array of South African pension funds were exposed to Steinhoff. But it nearly didn’t happen.
Ironically, listing on Johannesburg’s stock market was not the first place Steinhoff’s brains trust considered as an option to raise cash. At the time, in early 1998, Jooste was looking to buy a mattress supplier, but wasn’t sure where to get the money. So they bounced around the idea of listing Steinhoff in Frankfurt. The catch here, one to which Jooste was utterly allergic, was the requirement of having to dedicate half the seats on the boards to the trade unions. “It was unthinkable,” he said.24 They settled on Joburg instead. As a result, people would get the combined might of Victoria Lewis, Gomma Gomma, Bakker & Steyger, its recently purchased logistics company, Roadway, and a network of companies inside Steinhoff Europe, such as “young-style” sofa maker Poco and “country-style” upholstered furniture maker Conforta.
A stock exchange listing was a novel idea for Bruno Steinhoff, who, for 34 years, had never taken public money. “To go to the stock market was absolutely new for me,” he says. “I never learned that – I was never in a high school, I was always in my personal high school, learning everything by doing.”25 So, Steinhoff published a prospectus to woo investors. In it, the company billed itself as an “integrated lifestyle supplier that manufactures, warehouses and distributes furniture, bedding and case goods”. Steinhoff’s central competitive advantage, it said, was running its 43 factories in low-cost emerging countries, and then selling furniture into the wealthier developed world. Pretty much Bruno’s modus operandi.
With