Pepkor hands over list of footwear Mr Tekkie 'can't sell' | Fin24
 
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Pepkor hands over list of footwear Mr Tekkie 'can't sell'

Nov 13 2018 14:14
Carin Smith

Pepkor (formerly Steinhoff Africa Retail) on Tuesday delivered a list of Tekkie Town footwear to Mr Tekkie’s attorneys that it claims the latter is prohibited from stocking.

This follows an order by the Western Cape High Court last week that prevents Mr Tekkie from stocking certain footwear in their stores. According to a statement by Pepkor, "the list is confidential, but it is both lengthy and comprehensive".

Pepkor says it succeeded in demonstrating to the court that it has a protectable interest in terms of restraint of trade provisions that apply to the founders of Mr Tekkie.

"The effect of the order is that Mr Tekkie is now interdicted from stocking or offering for sale all of the items on the list sold by Tekkie Town," Pepkor CEO Leon Lourens said in the statement.

"While our legal team will focus on the trial that awaits next year, the committed Tekkie Town management and staff are getting on with retail matters and growing the business." He pointed out that Tekkie Town stocks a wide range of branded footwear and accessories, including Adidas, Converse, Vans, CAT, Hi-Tec, Nike and Puma.

Two victories?

Fin24 reported last week that both the Tekkie Town management and the Mr Tekkie founders felt vindicated by the court decision.

Mr Tekkie's founders said they were "elated" by what they claimed to be Pepkor's failed attempt to seek a restraint of trade order against them. At the same time, Pepkor claimed it emerged victorious from this round of the various legal battles between the two companies.

Judge Elizabeth Baartman found that the respondents "should not be hampered in their economic activity..." but added that Mr. Tekkie was interdicted from selling similar footwear to those sold by Tekkie Town.

"The court order confirms that Pepkor has demonstrated a valid right in terms of the restraints of trade. It further provides the necessary and justified interim protection for the Tekkie Town business while the dispute is referred to trial," Pepkor said in a statement at the time.

Mr Tekkie has already opened a few stores and continues trading.

In a statement on Tuesday, former Tekkie Town CEO and new Mr Tekkie head Bernard Mostert said: "Critically, the list received today was never produced before Judge Baartman, nor were the respondents handed the list prior to Judge Baartman's ruling being handed down for reply, as Judge Baartman had required Pepkor to do.

"The contents of the list have not been verified at all and in the state provided, are impossible to verify as the list refers to Tekkie Town’s internal classifications only and contains no industry standard definitions whatsoever. At this stage it is impossible to determine whether any items on the list – if any at all – could be subject to the terms of the order, which specifically refers to the date of 1 October 2016."

Mostert describes the list received by the Mr Tekkie legal team Tuesday morning as "overly broad and opportunistic".

"It is not the Annexure A that is referred to in the court order as there has never been one, and in any event, its contents are in stark contrast to Judge Baartman’s ruling,” said Mostert, who along with Braam van Huyssteen and four others are the respondents in the case. Mostert added that "it is critical to point out that Mr Tekkie is not a respondent to the case".

"In her ruling Judge Baartman stated: 'The effective date is 1 October 2016. I have considered that prior to that date, the respondents have employed entrepreneurial skill, talent and have achieved much success. They provide much needed employment. They should not be hampered in their economic activity beyond the effective date'," said Mostert.

He said that, when asked by Judge Baartman to produce a list during the court proceedings Pepkor "failed to do so".

"Its counsel claimed during the proceedings that the list was so exhaustive and detailed that it ran over 500 pages with thousands of style codes. The list Pepkor unilaterally produced today contains no style codes at all...,” states Mostert.

History

The then-partners in Tekkie Town sold the latter to Steinhoff in 2016, and it currently forms part of Steinhoff's subsidiary, Pepkor. The former Tekkie Town partners are challenging the Steinhoff transaction since the latter acknowledged accounting irregularities in its financial reports.

These reports had formed the basis of the disposal of Tekkie Town to Steinhoff, according to the former Tekkie Town partners. Tekkie Town has about 381 stores countrywide, and there are currently several legal battles relating to the Tekkie Town, Mr Tekkie businesses; as well as to Steinhoff's purchase of Tekkie Town.

Pepkor also brought an application requesting that the court order the name Mr Tekkie not to be used. 

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