Mr Tekkie, established by the founder of shoe retailer Tekkie Town after he left Pepkor, is expanding - opening a dozen new stores on Black Friday alone.
This brings the total number of stores to 15 since Braam van Huyssteen walked out of Tekkie Town in May this year, followed by a number of other executives and employees. Ultimately 117 people resigned over three days, including CEO Bernard Mostert and COO Dawie van Niekerk.
The relationship between Mr Tekkie and Pepkor executives has become something of a business brawl since the collapse of Steinhoff, which bought Tekkie Town late in 2016 and moved it into Pepkor as part of its African restructuring.
Pepkor has a retail footprint of 5,200 stores in 12 African countries. Tekkie Town has 397 stores in SA.
Now Pepkor and Mr Tekkie are embroiled in 11 court cases, the main one involving an attempt by the founders of the brand to get Tekkie Town back. Pepkor said in a statement that the bulk of the legal cases were initiated by Van Huyssteen, not Pepkor.
Van Huyssteen said he was asked to leave, and that the new Pepkor executive team had made it impossible to do his job.
He said his goal is to recover the Tekkie Town businesses "defrauded from us" and build another, complementary business alongside it.
A Pepkor spokesperson said Van Huyssteen and other respondents have, since January, attempted to undermine and discredit Pepkor and its management. He said there was no deliberate attempt to alienate Van Huyssteen.
Tekkie Town was sold to Steinhoff in late 2016 for R3.25bn. Of the purchase price, private equity firm Actis received R1.5bn in cash. The remaining executives were paid in Steinhoff shares, which are now almost worthless. In 2014 Van Huyssteen had sold 43% of Tekkie Town to Actis for $65m (R728m at the time).
Van Huyssteen said: "The shares Steinhoff gave us turned out to be the proceeds of fraudulent transactions. We ended up with worthless paper, but that wasn't the end of the world. At least we had a purpose by still running the business in the Pepkor stable. A worse nightmare presented itself when the management of Pepkor started to alienate us."
Also at issue is that some current and former Pepkor executives borrowed money to buy into the business venture investment scheme and their debt is now more than the value of the shares. This scheme allowed 44 Pepkor managers to take out loans collateralised by Steinhoff shares. The loans were allegedly guaranteed by the company but not disclosed in Pepkor's pre-listing statement, Van Huyssteen said.
"This was an investment scheme to create wealth, not an incentive scheme. The scheme was worth in excess of R3.5bn at one stage and is probably now worth nothing more than R30m to R40m, while these people still have the debt of R440m with RMB bank. I too had Steinhoff-related loan exposure and when Investec called me in December following the Steinhoff collapse, I paid them back in full the next day - with my own money."
The Pepkor spokesperson said: "As disclosed in our interim results during May 2018, we have provisioned for the guarantees. A board subcommittee is dealing with the matter and will provide feedback on the progress soon."
Van Huyssteen said: "On January 31 this year, the CEO of Pepkor told me what a wonderful entrepreneur I was, but simultaneously he thought maybe I am not so well suited to the corporate world".
Van Huyssteen said the Tekkie Town team and other Pepkor staff members who reported to them were supposed to be beneficiaries of an earn-out three years from the listing date of STAR (Steinhoff Africa Retail) - later renamed Pepkor - and there were two years still to go. An earn-out is when a seller receives an additional payment down the line based on the company's performance.
"Dr [Christo] Wiese and [Markus] Jooste at the time of the transaction explained they had this Speciality division, which was a massive loss-making part of their business. These [businesses] include Shoe City, John Craig and Dunns. They had losses in excess of R500m," said Van Huyssteen.
Wiese and Jooste asked him to take over the running of the Speciality cluster, and after running the division for six months it was profitable, Van Huyssteen said. He said that he'd exposed inefficient leasing in his new position, as the chair of properties overseeing leasing at Pepkor covering about 5,000 leases across Pepkor.
Pepkor said: "We have one of the best property divisions in retail and they continue to perform very efficiently with excellent performance ratios." It said there was "a new team leading the Speciality division at present and doing so very successfully".
Working now on growing Mr Tekkie, Van Huyssteen said: "Because I saw it as a train smash and we managed to walk away from the accident scene alive, I thought, 'Let's make the best of a bad situation'. We pretty much had the bulk of the R700m and are working to an earn-out which will be worth a minimum of R800m.
"There's a massive misconception that we want to compete with Tekkie Town," said Van Huyssteen. "We are in court to get Tekkie Town back and return the 'fool's gold', and we specifically designed Mr Tekkie in such a way that it would be complementary if and when we get Tekkie Town back. That's why they will not compete directly with each other." He said the crossover of products is a maximum of 15% to 20%.
For Van Huyssteen, a "big focus is on all the litigation . the R700m received from Actis still has a long way to go".
But Pepkor is not going to let Tekkie Town go without a fight.
It said: "Tekkie Town is an important business within the Pepkor Group and Pepkor will continue to defend it in the interest of its shareholders and the 3,701 employees whose livelihoods depend on it." Pepkor would defend Tekkie Town's legal rights in court, the spokesperson said.
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