Taste Holdings Initiates Liquidation of Domino’s Pizza

Taste Holdings [JSE:TAS], the struggling former owner of the Starbucks franchise in South Africa, says it is going ahead with a voluntary liquidation of Domino’s Pizza because it has failed to find a buyer for the pizza franchise.

The company, which has been facing poor retail sales, in November 2019, announced that it would exit its food businesses (Starbucks, Domino’s Pizza Maxi’s and The Fish & Chips Co), and that the company will shift its focus to luxury goods. The group’s luxury brands include NWJ, Arthur Kaplan and World’s Finest Watches.

The company sold its Starbucks business to Rand Capital Coffee for R7 million in November. In the same month, Taste announced that it had also found a buyer for Maxi’s and The Fish & Chips Co. The three brands were successfully disposed on 2 December 2019, after fulfilling certain conditions.

However, Taste Holding has since failed to find a suitor for Domino’s Pizza, despite engaging with several suitors.

In a statement published on the Stock Exchange News Services, the company said “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.”

The group will write off R450 million in shareholder loans, and 770 employees will be affected with 55 corporate stores closing with immediate effect.

“Franchisees for the 16 franchised outlets will continue trading with management providing advice and assistance where possible. Taste has received no communication as to the date of cancellation of the franchising licence, the group retains the regional franchising licence until further notice,” it said.

Taste’s move to liquidate the business comes after South Africa entered its second recession in two years in the final quarter of last year. The group is currently applying for liquidation and a liquidator to take over the food business.

READ MORE: South Africa Suffers Second Recession in Two Years

Taste Holdings said the Domino’s stores have been closed in an orderly fashion and the company will communicate further information on the liquidation as it becomes available.