A new Braam van Huyssteen retail group was born this week when he signed 10 leases with a landlord whom he has dealt with for many years. The name is still under wraps, but we are taking bets that it will involve the name Tekkie in some way or another.
Compared to the shoe string budget and little else he had when he opened his first store in Mossel Bay nearly 30 years ago, Van Huyssteen now has many factors counting in his favour: substantial funds, a solid knowledge of the value of strategic and affordable leases, an economic downturn that ensures plenty of open retail space, his own huge warehouse that can accommodate clearance stock (still occupied by Star, who have been given notice to vacate), good relationships with suppliers and an understanding of the market, and most importantly, the backing of almost 200 of the people who helped him grow the original Tekkie Town into 368 stores.
Putting people before profits was one the main strengths of the old Tekkie Town – and the reason for the walkout of 170-plus Tekkie Towners following the ousting of Van Huyssteen from Star and the resignations of Speciality Division CEO Bernard Mostert, COO Dawie van Niekerk and other executives like Gert Claassen and Michael Brown last week.
“The main reason we are walking away is because of the exceptionally hostile and personal campaign the Star hierarchy have waged against Dawie and myself in order to undermine us, just by virtue of our association with Braam,” said Mostert when he resigned last Monday. “It was abundantly clear to us that the whole process unfolding between them and Van Huyssteen was an agenda to settle a personal score and we always wanted to avoid that.”
Van Huyssteen categorically denies that he coerced anybody into resigning – but, he also says that he feels responsible for his people who are now out of jobs and would support them financially while his money lasts.
“This is something extraordinary happening, there are not many precedents,” a perplexed-sounding Star (Steinhoff Africa Retail) chairman Jayendra Naidoo told Bruce Whitfield’s Money Show after the first mass-resignations.
“Tekkie Town is an important part of STAR, operating 368 stores within STAR’s total retail footprint of more than 5 100 stores and contributes approximately 3% to STAR’s consolidated annual revenue,” the group said in a SENS announcement. “More importantly, Tekkie Town currently employs almost 3 200 people whose livelihoods depend on the continued operation of the Tekkie Town business and STAR is determined to protect them.”
Naidoo’s perplexion in a way symbolises the culture clash constantly mentioned by the former Tekkie Town executives. For people within the industry who have gotten to know the Tekkie Town business, this expression of solidarity came as no surprise – although the scale was unexpected.
This loyalty is reciprocated, as is clear from letters from former staff members. For example, former Tekkie Town chief information officer, Willem Wait, wrote to Star CEO Leon Lourens that the Tekkie Town culture was more important to him than continuing as a hired gun when he was asked to name his price to remain with Star. He explained that over the 11 years he was employed by Tekkie Town he learned that Tekkie Town is not the shoes, or the branches, nor the building, but the individuals that worked, stressed and sacrificed alongside me in order to fulfil a purposeful life and provide for their families … It is those individuals that … through their input, willingness and effort, (formed) a culture that can only exist when they come, stay and stand together. It is that culture I belong to and it is that … I want to stay part of till my time here is done.…
His feelings are echoed in a letter How do you put 14 years on paper (below) in which another former Tekkie Town employee explains why she resigned because she was not “willing to work for a company that I cannot trust and does not know my name”.
These testimonies explain the extraordinary success and growth of Tekkie Town: even though it was one of the biggest chains in our industry, it had all the hallmarks of an independent store: management operated like family and knew most of their workers, they kept a watchful eye on the budget and money flow and tried to avoid going into debt by growing from re-investing profits. They motivated staff to feel part of the success of the business – to the extent that Bernard Mostert promised that he would walk in a Speedo between the buildings on the George campus if they reached the high revenue targets … and he did.
Looking after people is also at the heart of one of the legal disputes that precipitated the walkout, namely a performance bonus for management agreed to by Steinhoff when they bought Tekkie Town, and then amended by former Star CEO Ben la Grange to include other Speciality Group managers as well after the Tekkie Town team was appointed to run this division. Star now disputes this because they say it was an agreement between Steinhoff and Tekkie Town before Star came into the picture.
This incentive was one of the reasons why the Speciality Group, managed by Tekkie Town people, grew sales 17.3% – like for like store sales grew 10.1% – in a difficult trading environment while Pep Africa like-for-like store growth was 16.2% down, says Van Huyssteen.
Yet, Star agreed to honour an agreement with former Pepkor executives to compensate them R440-m for the losses they incurred when their Steinhoff shares lost just about all value.
Star appointed Riaan van Rooyen, who became Operations Director of Ackermans in 2012, to replace Mostert as Speciality Group CEO. We didn’t receive a response to our request for more information about him. Naidoo told the Money Show that they will be employing a top team – from their 4 600 employees – to assist him. They will also enforce their legal rights to protect any IP (like IT systems) and assets to continue the business.
One thing they lack, however, is the sense of family, as expressed below by a former Tekkie Town employee:
How do you put 14 years on paper?
My Tekkie Town journey started in 2004, at store number 14 in Welkom, Free State. We had just moved to Welkom to stay with family: jobless, penniless and struggling to put food on the table. I saw an advertisement in the local newspaper of a Tekkie Town opening soon, but the application date had expired. I decided to take a chance and visit the store, as I had nothing to lose.
I gathered every bit of self-confidence I could, put a smile on my face and entered the store. I was amazed by the beautiful concept of branded footwear on the floor, brand call-outs on the walls and bright lights. Behind the counter stood a man with sharp blue eyes and he introduced himself as Gert Claassens. For a while, we discussed the store and the stock. I enquired about a possible position. He made a phone call to someone, asking him to return to the store to meet with me.
A man entered the store, greeted me with a firm handshake and introduced himself as Michael Brown. We had a conversation and then he said: “see those socks lying on the floor, hang them on those pegs.” When I was done he simply asked: “So, when can you start?”
That day, Michael Brown saw something in me that I did not yet see in myself. He believed in me and gave me a chance, even though I was the oldest applicant, knew nothing about retail and even less about selling shoes.
I saw casuals and managers working shoulder to shoulder, sweating together as equals to get that store ready for opening. Their passion for Tekkie Town was running thick through their veins. For Gert, operating a vacuum cleaner was part of the job and not beneath him. That is still the same today.
I started as a sales casual selling shoes and was promoted to Assistant Manager in a week. Within a month, the Manager resigned. I phoned Michael and he said: “you have the keys, you are now the new manager of the store.” I said sure, but that I would need training as this was all new to me. He simply replied: “I will train you over the phone, if you don’t know how to do something you just phone me.” The CEO of the company was willing to train me over the phone. I did call, and he provided training on managing a store – even when he was in meetings, he would answer my calls and provide guidance. If this was at any other company, I doubt that I would have made it through a month.
Our little store of 263m² was doing very well. Braam van Huyssteen visited the store, knowing the name of every salesperson, enquiring about their families and loved ones. He treated us like family, giving hugs and praise for a store looking neat and doing well. Braam never made us feel like we were working for him, he always gave us the impression that he was the proud guest visiting our successful business venture and that we can teach him how to do it better. That was the standard that he set from the start, if you look after your people like family, your people will look after you, no matter what.
One day, a man arrived at the store, very tall with a big smile and a jump in his step. He introduced himself as our new Area Manager, Dawie van Niekerk. Within minutes he knew everyone’s name and family setup and had made a connection with every staff member on a personal level. His knowledge was overwhelming. He was not shy to work, he taught us the art of selling, knowing your product and your customer, and how to respect our teams. He led by example and taught us how to respect what is true.
I transferred to George after almost three years in Welkom. I had the privilege to report to Gert in the stock department for the past several years. He is the person with the most retail experience and knowledge of the trade that I have ever met. Gert taught me that hard business with a soft heart is possible. He practiced what he preached and gave me exposure to expand my knowledge and my experience in the trade.
I think to carry the label of a true leader is often a heavy load and sometimes a lonely journey, but you will never say that if you look at Bernard Mostert. What a remarkable, intelligent leader. He always has your wellbeing and the wellbeing of the business at heart. I don’t know of many CEO’s who had an open-door policy for ANY of the employees to freely see him. You always feel welcome and are treated with respect. He made a point to know every head office employee’s name and was not too important to take and ask advice in a group. He was the guy who thanked the warehouse staff for being so good at what they do – at ensuring that he and the rest of us have a job.
One would think that after 14 years and with the accumulation of stores, the culture would change, well it did, it grew stronger. It grew stronger because of the Braam van Huyssteen’s fingerprint on Bernard, Dawie, Gert, Michael and all the management teams that kept to the strategy of people first. Building relationships and standing together as one is a culture that is very rare and, in a way, sacred. The quote “people don’t care how much you know until they know how much you care” has a true meaning if you experience and live it daily.
So, when Bernard and Dawie resigned it was crystal clear what I would do. I was not willing to work for a company that I cannot trust and does not know my name. Braam, Bernard, Dawie, Gert and Michael were there for me when I had nothing and when I knew nothing. They mentored me and gave me the opportunity to grow and to learn. They gave me the confidence to mentor others and to treat every part of the business as my own. My place is shoulder to shoulder beside them.