RFG about to close more doors

RETAIL Food Group is expanding its store closure program after the Gloria Jean’s and Donut King operator slumped to a $ 306.7 million full- year loss.

RFG, whose shares in August hit an all- time low as it tried to clean up following accusations it was badly treating franchisees, now plans to close 250 domestic stores – up from the previously announced 200 – by the end of the 2019 financial year.

Revenue for the 12 months to June 30 rose 7.1 per cent, but the company was forced to make $ 402.9 million in impairments and provisions to cover store closures, restructuring and a reduction in the value of its brands and assets.

Shares in the company plummeted by as much as 12 per cent following the release of its results yesterday.

Chief executive officer Richard Hinson, who replaced Andre Nell in May, said the company would continue to assess franchisee sustainability, but did not say which stores had closed so far or where the affected Gloria Jean’s, Donut King or Michel’s Patisserie stores were.

He could not immediately say how many staff had been affected. Mr Hinson did not say whether the former management had apologised to franchisees, insisting it was about “actions speaking louder than words” for his new regime.

“The primary focus is improving the sustainability of our franchise customers, to ensure they are sustainable going forward,” he said.