RFG profit warning

SHARES in Retail Food Group (RFG) plummeted for a second day after a damaging profit warning from the embattled owner of the Gloria Jean’s, Michel’s Patisserie and Donut King brands.

RFG shares fell 17.9 per cent to $1.625 yesterday, their lowest value since July 2009, compounding a 25 per cent slump suffered on Tuesday when the company warned its first-half profit is expected to decline by more than a third.

The group’s shares have now fallen 63 per cent since December 11, after Fairfax Media first published stories from an investigation into allegations of high fees and financial stress suffered by franchisees.

The Fairfax reports have also claimed that significant proportions of Gloria Jean’s and Pizza Capers franchises are up for sale.

The share price slide has wiped out $507 million from RFG’s market value in just eight trading days.