Poor-performing Dunkin Donuts and Baskin Robbins to exit South Africa, says Grand Parade Investments.
In a statement released on Friday, Grand Parade Investments (GPI) announced that assets Dunkin Donuts and Baskin Robbins, which have negatively impacted the group’s cash resources, will be exiting South Africa.
The exit forms part of the company’s value-based strategy, which aims at improving their capital allocation.
Acting CEO Mohsin Tajbhai said that it was apparent that both brands would not meet their original, nor revised forecasts based on the poor performance of existing stores.
"We have been actively pursuing opportunities to exit these businesses in the most effective and efficient way since September 2018. We have engaged with several potential buyers over the second half of 2018 and have decided that voluntary liquidation of both businesses is the best possible option in the absence of any serious offers," says Tajbhai.
"While disappointed in our inability to gain traction in SA, Dunkin Brands International is aware of our decision to exit. The liquidation process will be managed in such a way that obligations to landlords and staff can be dealt with responsibly. Of the 120 staff impacted, we will aim to accommodate as many as possible in our other businesses or pay appropriate retrenchment compensation to those who cannot be offered alternative employment."
Despite the closure of Dunkin Donuts and Baskin Robbins, GPI is focusing on optimising the profitability of existing restaurants in the group, while ensuring that the new restaurants they open are all quality stores.
They believe that this is the right decision for all stakeholders and that they are now better positioned to focus their efforts on building onto the current momentum at Burger King.
