Donut King operator to shut 250 stores

GLORIA Jean’s, Donut King and Michel’s Patisserie operator Retail Food Group will close 250 stores after slumping to a $306.7 million full-year loss.

The group’s shares hit an all-time low this month after accusations it was badly treating franchisees.

It plans to close 250 domestic stores, up from the previously announced 200, by the end of the 2019 financial year.

Revenue for the year to June 30 rose 7.1 per cent, but the company made $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 closed 8.8 per cent lower.

CEO Richard Hinson said the company would continue to assess franchisee sustainability, but did not give details on the affected Gloria Jean’s, Donut King or Michel’s Patisserie stores.

And he could not say how many staff were affected.

“The primary focus is improving the sustainability of our franchise customers to en- sure they are sustainable and profitable going forward,” Mr Hinson said.

In March, RFG posted an $87.8 million first-half loss, fuelled by $138 million in writedowns and provisions for the closure of up to 200 stores.

RFG has more than 2400 outlets across Australia and internationally, and employs about 15,000 employees.