Taste Holdings [JSE:TAS], former owner of Starbucks, announced that it will voluntarily liquidate Domino’s Pizza, following its failure to find a buyer for the pizza chain.
The news comes after Walmart-owned Massmart announced this week about the closure of 23 DionWired stores in SA. Although yet to recover from Edcon’s woes, Retail landlords are set to face even more intense pressure from Massmart’s announcement.
The introduction of Domino’s Pizza to the South African market in October 2014 broke several sales records in the first full week of trade, with sales at the first four stores more than exceeding expectations.
However, the business has since run into problems as slow economic growth, subdued consumer spending hurt its margins and profitability.
In 2019, Taste Holdings said that it will be exiting Starbucks, Domino’s Pizza Maxi’s and The Fish & Chips Co.
Going by what it same at the same time, the company will be shifting its focus to luxury goods, a space in which it already has NWJ, Arthur Kaplan and World’s Finest Watches brands.
The offloading started in November when it sold its Starbucks business to Rand Capital Coffee in a R7m deal. In the same month, the South African firm said it had found a buyer for Maxi’s and The Fish & Chips.
On 2nd December, 2019, Taste successfully disposed 3 brands after fulfilling certain conditions. But having failed to offload is Domino’s Pizza Franchise, the wind up will see 770 employees lose their jobs. 55 stores owned by the company have closed in the country.
Taste Holdings CEO Duncan Crosson said the move affects 770 employees and the 55 Taste Holdings corporate stores have closed effective immediately.
“Domino’s Pizza LLC [the US franchise company] provided financial support and assistance during this period. Unfortunately, a deal could not be concluded on terms acceptable to all parties and further financial support was not provided by DP. As a result, it was decided to place the respective entities into voluntary liquidation,” said the company in a statement published on the Stock Exchange News Services.