Retail Food Group shares hit their lowest mark since 2008 on their return to trade following a suspension during which the owner of the Donut King and Gloria Jean’s chains announced the closure of up to 200 stores.
Shares in the embattled firm plummeted nearly 50 per cent to $1.03 in early trade on Monday – their lowest mark since December 2008 – before rebounding slightly.
At 1141 AEDT, the shares were down 65.5 cents, or 32.1 per cent, at $1.385.
Shares in the franchise owner, which also operates Brumby’s Bakeries and Pizza Capers, were suspended on Wednesday for failing to release its first-half results on time.
When the accounts were released on Friday, RFG revealed a first-half loss of $87.8 million due to $138 million in writedowns and provisions.
It also suspended its dividend and said it would shut up to 200 stores by mid-2019.
The company had released two profit warnings and been hit with a potential class action since November, when media reports claimed RFG was harshly treating franchisees.
Its shares have shed more than two thirds of their value.
Managing director Andre Nell on Friday acknowledged RFG needed to do more to help franchisees.
‘It is clear from the review process that RFG needs to reset its business model and enhance its support to franchisees,’ Mr Nell said.
Following accusations that hundreds of franchisees suffered under a brutal business model and a lack of support that led to systemic underpaying of staff, RFG promised to lift compliance on wage payments.
RFG, which has 2,450 outlets made a $45 million non-cash impairment against Michel’s Patisserie, $34.5 million against its coffee division, and $4.5 million against Pizza Capers.