FILE PHOTO: A Starbucks brand is mirrored on a window on the store in Rosebank, South Africa, November 27, 2018. REUTERS/Siphiwe Sibeko
JOHANNESBURG (Reuters) – Style Holdings (TASJ.J), proprietor of Starbucks and Domino’s Pizza franchises in South Africa, mentioned on Friday it was abandoning the meals enterprise, and had already bought its 13 shops of the espresso chain to a consortium for 7 million rand ($464,000).
The corporate mentioned it was additionally in discussions on the sale of Domino’s (DPZ.N) and its two different meals companies, restaurant chain Maxi’s and The Fish & Chips Co, as a part of a brand new technique to turn into a solely luxurious retail group.
It had been attempting to show its meals enterprise round after placing Starbucks (SBUX.O) and Domino’s expansions on maintain a 12 months in the past amid losses – making Style considered one of a string of retail corporations damage by a troubled South African economic system.
In a press release, it mentioned that after months of canvassing potential companions and capital suppliers, it had turn into evident that the cash required to fund its plan couldn’t be secured with the present enterprise construction and market circumstances.
“Style’s board of administrators has subsequently revisited the earlier technique and has determined that it’s in the very best pursuits of the Firm and all stakeholders to exit the meals enterprise,” the assertion mentioned.
Starbucks mentioned in a press release the sale would offer the required capital to attain its ambition of getting as much as 200 shops in South Africa. A spokeswoman famous that Starbucks shops had been worthwhile with Style.
Client-focused corporations from banks to retailers have been struggling in South Africa, the place a stagnant or contracting economic system, unemployment of close to 30% and rising residing prices have left many with little further money.
Style mentioned following the sale of the…