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Tag: Crust

  • RFG back to square one in asset sale process

    RFG back to square one in asset sale process

    Retail Food Group on Tuesday said sale talks with a potential buyer of its Donut King, Pizza Capers and Crust businesses have ended in disappointment, following months of negotiations.

    The deal fell through after the two parties failed to reach a formal binding agreement on terms that the board considered to be in the best interests of the company as a whole, RFG said in a statement.

    “Our Donut King and QSR brands [Pizza Capers and Crust] continue to provide solid earnings contributing to the company’s underlying profit,” Peter George, executive chairman of RFG, said.

    “The potential sale of any of these assets must be at a price not only acceptable to our board but in the best interests of our shareholders.”

    The franchisor, which operates Gloria Jean’s Coffees, Brumby’s Bakeries, Donut King, Michel’s Patisserie, Di Bella Coffee, The Coffee Guy, Café2U, Pizza Capers and Crust, had been pursuing an asset sale to help pay down its net debt of roughly $258.9 million, after restructuring costs and write-downs wiped out its declining profit in the first half of FY19.

    An RFG spokesperson said the failure to sell its Donut King and QSR brands will not impact the company’s recent agreement with NAB and Westpac to reset its financial covenants and waive a review of the business.

    The company continues to work closely with its lenders and maintains their support, the spokesperson said.

    The RFG board is investigating a range of other options to pay down its debt, including equity, other debt funding options and potential asset sales, and will update the market of any definitive option being reached.

    In response to a report that the Australian Securities and Investments Commission is “keeping an eye” on the franchisor, particularly around big announcements, the RFG board said it has not been made aware of any current investigations.

    A spokesperson for ASIC told that “ASIC supervises the market, so we monitor all share trading”.

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  • More refresh design for Pizza Hut Australia

    More refresh design for Pizza Hut Australia

    Pizza Hut Australia has taken its next big step back into the fore, unveiling a new brand image and concept store in a bid to redefine its position in Australia’s highly competitive pizza market.

    The new store, launched yesterday in Sydney has been designed as a fresh take on contemporary Australia with ties to the brand’s US heritage and will inform a broader store refresh program, which began earlier this year.

    Its original brand icon Pizza Pete has also been reintroduced into signage and internal designs alongside several menu innovations, such as localised flavours, designed to cement its point-of-difference as a dine-in pizza option – juxtaposed to market leader Domino’s delivery-focused offer.

    The move is a sign that the chain’s owner, private equity firm Allegro Funds, is looking to bolster the consumer-side competitiveness of the chain, after it purchased the master-franchise license for Pizza Hut from American owner Yum! Brands in 2016.

    Under Yum! Pizza Hut began falling behind rival Domino’s technologically enabled fast-delivery model, prompting management to spend the last year undertaking a broad-based improvement plan within the business that included the acquisition of Eagle Boys outlets late last year.

    Allegro has also been busy bringing new talent into the business to reposition its future under the stewardship of former McDonald’s executives Peter Rodwell, Lisa Ransom and Chris Leslie. The chain’s new director of innovation, Matthew Sawyer, who was brought over from McDonald’s in December last year, said that the re-brand would deliver a local spin on a well-known brand with global credentials.

    “Pizza Hut in previous years had lost its direction and when we took over the business we clearly identified that there was a lot of love for the brand – in particular the old dine-in restaurants with the all you can eat buffets and the self-service desserts,” he said. “We knew we had to do something around that to reconnect with the Australian community.”

    Sawyer said dine in will be a point-of-difference for Pizza Hut’s new look, with franchisees given autonomy within a flavour toolkit to localise parts of the menu. He calls it ‘glocal’ – a play on the words local and global – a philosophy that will be rolled out through the 300+ store network.

    “Over the next few years you’ll see significant change in the brand, how fast we roll this out will depend on how fast we learn about how well certain items work in different communities,” he said. “That’s the thing about global, it’s going to be different everywhere.”

    In many ways the dine-in focus doubles down on Pizza Hut’s pre-existing market position, but made-to-order rather than pre-prepared pizzas as well as new delivery methods, such as electric bikes, will round out the new offer.

    Allegro has previously said it has no intention of contesting Domino’s market leading position, but does want to cement itself as the number-two in the Australian market, making Retail Food Group (RFG)’s Pizza Capers and Crust brands relevant competitors.

    RFG has been embarking on its own repositioning since last year, revamping its QSR division to focus more heavily on lunchtime business with new products and mobile food trucks. IBISWorld data from 2016 placed Pizza Hut’s share of the local market at just over 15 per cent after the Eagle Boys acquisition, compared to Domino’s 25 per cent share and RFG’s 4 per cent share.

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