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Tag: Berjaya Food

  • Berjaya Food Reports Rising Losses: Starbucks Malaysia’s Struggles Amid Middle East Conflict

    Berjaya Food Reports Rising Losses: Starbucks Malaysia’s Struggles Amid Middle East Conflict

    Berjaya Food, a Malaysia-based company, has recently reported a significant increase in losses and a decrease in sales for both their fourth quarter and the entire fiscal year. Berjaya Food, which operates Starbucks Coffee in Malaysia and Brunei, along with Kenny Rogers Roasters and Paris Baguette in Malaysia, experienced reduced sales due to a decrease in store numbers.

    Quarterly Report

    The revenue for the group, for the quarter ending on June 30, experienced a decrease of 11 per cent compared to the previous year, settling at RM115.8 million (US$27.4 million). This reduction is mainly attributable to the decrease in the number of store locations. However, the management has noted a slight increase in sales compared to the third quarter. This increment is primarily due to an improved sales performance from Starbucks Malaysia.

    In this quarter, the loss before tax increased from RM42.6 million to RM183.7 million. The primary reason for this increase was the impairment of property, plant, and equipment (PPE) and right-of-use (ROU) assets linked to non-performing stores.

    Annual Report

    For the entire fiscal year, the revenue dropped by 36 per cent, amounting to RM476.7 million. This drop is linked to the ongoing sentiment surrounding the Middle East conflict, which has affected market dynamics and altered customers’ purchasing behaviours.

    The pre-tax loss for the year broadened from RM89 million to RM288.7 million. This loss was due to the necessary impairment provision to PPE and ROU assets, resulting from the downsizing of Starbucks Malaysia’s operations.

    Questions & Answers

    What were the main reasons for the loss in Berjaya Food’s fourth quarter and fiscal year?
    The primary reasons were the impairment of property, plant, and equipment (PPE) and right-of-use (ROU) assets of non-performing stores, and also the downsizing of Starbucks Malaysia’s operations.

    Did Berjaya Food see any improvement in the fourth quarter compared to the third quarter?
    Yes, sales were slightly higher in the fourth quarter compared to the third, primarily due to improved sales performance at Starbucks Malaysia.

    How did the Middle East conflict affect Berjaya Food’s annual results?
    The ongoing conflict in the Middle East has influenced customers’ spending patterns and affected market dynamics, which contributed to the significant drop in the annual revenue.

  • Kenny Rogers Roasters, Jollibean to enter India market

    Kenny Rogers Roasters, Jollibean to enter India market

    The Kenny Rogers Roasters and Jollibean food retail brands are to launch in India.

    Malaysia’s Berjaya Food has signed a preliminary franchise partnership deal with India’s World Iconic Brands Hospitality (WIB) to take the banners into the new market.

    WIB will invest US$50 million to open 30 Kenny Rogers Roasters restaurants and 75 Jollibean kiosks in India over the next five years.

    Berjaya Food owns the two chains as well as operating Starbucks in Malaysia and Brunei.

    CEO Sydney Quays describes India as “a stepping stone” for the company to expand into more foreign markets.

    “We have a lot of interest from Southeast Asian countries,” he told the Sun Daily.

    With 970 shopping malls and more than 200 airports, India represents a strong potential market for both the brands, said WIB MD Gaurav Marya.

    “We’ll spend the next six to eight months to get the model right, understand the preference of consumers and we will scale up the business,” he said.

    The first new outlet will open early next year.

    WIB is a subsidiary of Franchise India, Asia’s largest integrated franchise solutions company, which manages 400 brands.

    Kenny Rogers Roaster restaurants already operate in Malaysia, the Philippines, Singapore, Indonesia, Thailand, Bangladesh, India and Dubai, while India is only the second offshore market for Jollibean, after Singapore.

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  • Starbucks to open Reserve store in Malaysia

    Starbucks to open Reserve store in Malaysia

    Starbucks Malaysia is about to open its first Reserve store.

    Local franchise holder Berjaya Food plans to expand its existing Berjaya Times Square Starbucks outlet into the new up-market format.

    The brand has entered into a sale and purchase agreement to secure an 829sqft space adjacent to the existing café for a reported RM12.43 million (US$3.05 million). The space was purchased by investment firm Deru Klasik for RM3.83 million in 2005. The purchase is expected to be completed by the end of this year.

    Berjaya Food said the Starbucks Malaysia Reserve store will provide customers with a personalised, hand-crafted coffee experience, adding that the property acquisition should enable the group to benefit from any future capital appreciation.

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