JOHANNESBURG - Grand Parade Investments (GPI) said on Friday it was exiting poor performing assets Dunkin Donuts and Baskin Robbins as part of a value based strategy aimed at improving the group’s capital allocation.
"Since June 2018 it became apparent that both brands would not meet their original, nor revised forecasts based on the poor performance of existing stores," acting CEO Mohsin Tajbhai said, adding that the businesses had negatively impacted the group's cash resources.
He said GPI had been actively pursuing opportunities to exit these businesses in the most effective and efficient way since September 2018.
" We have engaged with several potential buyers over the second half of 2018 and have decided that voluntary liquidation of both businesses is the best possible option in the absence of any serious offers” Tajbhai said.
He said Dunkin Brands International was aware of GPI's decision to exit and the liquidation process would be managed in such a way that obligations to landlords and staff could be dealt with responsibly.
Of the 120 staff impacted, GPI would accommodate as many as possible in its other businesses or pay appropriate retrenchment compensation to those who could not be offered alternative employment.
"This process has no bearing on our Burger King franchise where we currently operate 82 stores and are EBITDA (earnings before interest, taxes, depreciation, and amortization) positive at group level," Tajbhai said.
"Nevertheless we are focusing on optimising the profitability of existing restaurants while ensuring that the new restaurants we are opening are all quality stores."
He said the closure of Dunkin Donuts and Baskin Robbins would allow GPI to free up capital and assist in funding the growth of Burger King.
- African News Agency (ANA)