Taste Holdings exits food business, sells Starbucks for R7m
JSE-listed Taste Holdings will be exiting the food business, with all of its Taste food brands – Starbucks, Domino’s Pizza, Maxi’s and The Fish & Chips Co – to be sold.
This will allow the company to become a focused luxury retail group, comprising the NWJ, Arthur Kaplan and World’s Finest Watches businesses.
The decision follows after Taste Holdings indicated in February that it would require at least R700-million to reach positive free cash flow, and that the Starbucks network would need to expand to between 150 and 200 cafés and Domino’s to between 220 and 290 restaurants.
After consideration, following months of operational reviews and canvassing potential partners and capital providers on its long-term objective, the capital investment for the expansion strategy could not be secured, given the current business structure and existing market conditions.
The company has subsequently, through its wholly owned subsidiary Taste Food, entered into an agreement to dispose of the Starbucks franchise business in South Africa to an undisclosed buyer for R7-million.
The Starbucks business comprises 13 corporate-owned Starbucks stores in Johannesburg, Pretoria and Durban.
Taste Holdings is in discussions with various parties regarding the sale of all the remaining food assets. Source: Engineering News