Famous Brands, the South African group behind Steers, Debonairs Pizza, Wimpy and Mugg & Bean, is looking north for growth. Chief executive Darren Hele told BusinessDay after the group's interim results that Kenya is the market outside South Africa that excites the group most, and that it is negotiating a licence agreement in Ghana.
"We are already trading in Kenya, but we definitely see the growth opportunity there," Hele said. The group already runs Steers, Debonairs Pizza and Mugg & Bean in Kenya, but its footprint there is still small. "We will be opening quite a number of stores over the next six months."
Where the group is going
- Ghana: "We are in the throes of negotiating a licence agreement," Hele said, without giving details.
- East Africa: the group sees openings beyond Kenya and is watching Sudan, where it has reopened a restaurant.
- Asia: it recently opened a second Steers and a second Debonairs Pizza in Malaysia through licensing.
- Middle East: the group has exited the region.
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The push comes as South African consumers struggle with high fuel prices and affordability, conditions Hele expects to last at least six months. "The consumer isn't going to get any more money from somewhere else," he said. Famous Brands has said it plans to open about 80 new restaurants in the second half of its financial year, and it is investing in drive-throughs and its Munch technology platform for ordering, payments and customer engagement.
The weak spot is its Signature Brands division of eight niche brands, including Mythos, Salsa Mexican Grill, Turn 'n Tender, Vovo Telo and Paul. Its revenue fell 8.4% to R95 million, with an operating loss of R9 million, according to BusinessDay. Hele blamed mainly Paul, a luxury bakery chain run as company stores under an international licence, which cannot simply be turned into franchises. Management plans to fix the business rather than sell it.
