Taste Holdings to keep expanding its luxury goods division
DURBAN – Taste Holdings said it is continuing to focus on the expansion and growth of its luxury goods division, which is in line with its revised strategy for the group. Last month, Taste Holdings sold its South African Starbucks franchise for R7 million and intends to exit all of its food businesses.
The group said on Friday that it was engaging with potential suitors to dispose of the Domino’s brand.
“Once Taste has exited the food business, our focus will move to the expansion and growth of the luxury goods division. There has been a short-term contraction in the industry, but opportunities still exist for a strong value proposition and well-managed business,” the group said.
It added that certain shareholders have given some financial support by providing loans totalling R14m to support Taste in executing its strategy to exit the food business.
“Domino’s International Pizza is also providing financial support and assistance in disposing of the Domino’s brand. The loans received will be used for working capital requirements,” the group said.
Taste said it will continue to focus on its strategy in the luxury goods division and believes that its efforts in business optimisation, exploring new opportunities and initiatives, coupled with world-class quality brands and deep institutional knowledge within the business will positively position the division for the future.
The luxury goods division consists of 54 NWJ retail outlets, 40 corporate and 14 franchise, eight Arthur Kaplan and one World’s Finest Watches.
In the six months to the end of September, the luxury goods division’s performance improved compared to last year, driven by positive same-store sales, gross margin improvement and vigilant cost containment. The group said inventory continued to be well managed, inventory days improved by 6 percent compared with last year.
However, the division’s system-wide sales declined by 4 percent to R226m as a result of nine store closures in NWJ, one in Arthur Kaplan and three stores being refurbished during this period.
But same-store sales were increased by 2.8 percent, while NWJ sales were up by 2.6 percent, with corporate stores increasing by 7 percent, while franchise stores fell by 7.5 percent.
Arthur Kaplan and World’s Finest Watches sales improved by 2.9 percent, with a retail selling price inflation down by 1 percent.
In the group’s overall results, revenue declined by 10 percent to R421m, while revenue in the food division declined by 18 percent to R204m and revenue in the luxury goods was down by 2 percent to R217m.
Its headline loss a share improved by 31 percent to 5.5 cents a share compared to 8c loss reported last year.
Taste shares closed 33.33 percent lower at 2 cents on the JSE on Friday.