The performance of the owner of Gloria Jeans, RFG, is "unsustainable," says the president

Loading

"Although our franchise customers have been encouraged to improve the network, the current financial performance of the company is not sustainable."

At the annual general meeting of RFG on Thursday, he told shareholders that reducing debt and improving customer service were top priorities.

"It is likely that we will have to sell badets, recapitalize the balance sheet and significantly reduce our cost base," he said.

Mr. George said that RFG was currently in turmoil because of a number of "interrelated challenges", starting with a period of rapid growth and many acquisitions from 2012 to 2016, followed by the release of senior executives.

"The return to a more agile, customer-centric organization has begun, but there is still much work to be done," said George.

The debts of RFG amounted to $ 258.9 million as at June 30 and, pursuant to an agreement with its lenders in August, the proceeds from the sale of badets will be used to repay this debt.

The agreement with Westpac and the National Australia Bank has advanced the date by which it must refinance its debt from January and December 2020 to October 2019.

RFG Group CEO Richard Hinson said the company was trying to help franchisees with lower fees, lower prices for products purchased at head office and other measures.

RFG had consolidated its wholesale coffee business under the Di Bella Coffee brand, which was the future of the company's business, George said. Mr. George stated that RFG could not give any indication of profit.