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Braam van Huyssteen started Tekkie Town in 1989 with R20,000 ($1,230) and no external funding. He never borrowed a cent. By the end of 2013, that original capital had grown to R1.88 billion ($115.6 million), a return of approximately 90,000 times the starting investment. By 2016, the business had expanded to approximately 220 stores and sold to Steinhoff, then one of South Africa's largest retail groups, for R3.2 billion ($196.9 million).
Eighteen months later, it was worth almost nothing.
Bernard Mostert, who served as Tekkie Town's chief executive alongside Van Huyssteen and helped scale the business into one of South Africa's most recognizable shoe retail brands, described the full arc of the deal at the 9th BizNews Conference in Hermanus, in a presentation that was equal parts cautionary tale and hard-won wisdom.
The deal that looked like a triumph
For Mostert and Van Huyssteen, the Steinhoff acquisition initially appeared to be the culmination of decades of disciplined, debt-free growth. The pair had built Tekkie Town on their own terms, without corporate benchmarking, without market-related salaries and without the kind of financial engineering common in large retail groups.
That simplicity created an early friction with Steinhoff founder Markus Jooste. Shortly before the deal was concluded, Jooste raised what he described as a troubling discovery.
"He said it never came to his attention that we all earn what he termed peanuts," Mostert recalled. Jooste proposed substantially higher salaries for the Tekkie Town leadership team. Van Huyssteen initially rejected the idea outright, describing the proposed remuneration as "gluttonous." The pair eventually accepted increases but took less than what was offered. Mostert took approximately 40% of the suggested salary and Van Huyssteen approximately 20%.
The episode had an immediate financial consequence. Because the founders had previously been paying themselves below-market salaries, Jooste reduced the purchase price of the business to reflect the adjustment. The entrepreneurs who had spent decades building a R3.2 billion ($196.9 million) enterprise walked away from the negotiating table with less than they had entered it.
"A salary is a very, very false sense of comfort," Mostert said.
The collapse
In December 2017, Steinhoff disclosed accounting irregularities that triggered one of the largest corporate scandals in South African history. The company's share price collapsed, losing more than 90% of its value within days. The R3.2 billion ($196.9 million) consideration Van Huyssteen and Mostert had received in Steinhoff shares was effectively wiped out.
Mostert said the pair were outsiders who had not known about the fraud and had not put other assets into Steinhoff beyond the proceeds of the Tekkie Town sale. Yet they still had to fight to regain their business and recover what they could.
Years of litigation followed. In 2021, Mostert said he recovered approximately R500 million ($30.8 million) in cash, along with a stake in Pepkor, the retail holding company that owned Tekkie Town as a subsidiary within the broader Steinhoff structure.
The comeback
Van Huyssteen and Mostert eventually moved forward, rebuilding through FrontierCo after rescuing the House of Busby retail group from business rescue. They committed approximately R70 million ($4.3 million) to the new venture. That capital has since been repaid and the business now generates more than R1 billion ($61.5 million) in annual turnover.
Mostert said the Steinhoff experience permanently altered his view of selling a successful business. His advice to entrepreneurs who do not need the money was direct. "My best advice to you is to do nothing," he said.
He urged business owners to weigh not only the immediate financial reward of a sale but the long-term value of independence, employee relationships and compounding growth. "Don't be seduced by the short-term benefits. Rather, look at what the compounding effect would be on where you've come to at that point, not just compounding effect financially, but in a lifestyle sense as well."
The lesson he said he carried most deeply from the experience: "When greed walks in the door, loyalty walks out the door."
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