RETAIL FOOD GROUP VOWS TO TURN BUSINESS AROUND
TROUBLED Retail Food Group (RFG) says it has embarked on a turnaround, cutting costs to franchisees, revamping key brands and sending executives to work in individual businesses.
The group’s new chief executive Richard Hinson said that the key to the company’s recovery strategy would be listening to franchisees again and providing adequate support in an increasingly tough retail environment.
The shares lost 5.63 per cent, or 4¢, to close at 67¢ yesterday - the third consecutive record low in three days. RFG shares have fallen almost 73 per cent so far this year.
Mr Hinson said he would embark on a national roadshow next month to visit franchisees, including Michel’s, Brumby’s Bakery, Gloria Jean’s and Donut King businesses, to listen to their ideas about the company’s future. Key brands such as Brumby’s and Michel’s were being revamped with better product displays and store designs.
Mr Hinson, a 46-year-old retailing veteran who has worked at IGA, Woolworths and Goodman Fielder, replacedAndre Nell at the helm of the company last month.
Gold Coast-based RFG has flagged a net loss of $87.6 million this year as it battles complaints from franchisees about rising costs, franchise fees and lack of head office support.
Mr Hinson said the company was moving to provide better support and advice to franchisees. He had now made it mandatory for prospective franchisees to obtain independent financial advice before buying a franchise.
“We need to get better,” said Mr Hinson, who yesterday visited the Brumby’s store at Red Hill. “There are some green shoots of recovery but we have a lot of work to do.
“Any turnaround is going to take between 12-18 months. At the moment, we are already starting to get some good traction in the franchising area.”
Mr Hinson said the company had passed on $3.6 million to franchisees in reduced costs of key supplies such as flour. About 75 per cent of all Brumby’s franchisees would pay less for their flour under a new supply agreement.