Still a long way to go

With its share price graph showing the sort of gradient that you’d be much happier to see at a ski resort than in your equity portfolio, Taste has had to produce some seriously fancy footwork to halt the slide.

The first step at the start of the financial year was to ship in a new CEO and COO, with a clear mandate from the board to kick every tyre and work out what had been causing the decline in performance, then to develop and implement a strategy to turn it all around.

The new management team decided that the core problem was a lack of focus caused by the attempt to introduce two global brands and a centralised distribution system, and to bed down its luxury goods division all at the same time.

To sharpen things up, they split the food and the luxury goods divisions into two distinct units managing their own operations, with a scaled-down head office responsible for IT, capital raising and strategy determination.

Management identified three businesses for the axe, outsourced the jewellery manufacturing operations and the food division’s supply chain operations, and exited the Zebro’s brand. Encouragingly, the company was open about its situation with its partners Starbucks and Domino’s, both of which were forthcoming with practical ideas and support for the business plan, which has boosted Taste’s confidence. There’s a long way to go and plenty of execution to do before the turnaround becomes a reality, but it’s been a promising start.