GBK's struggles take bite out of Famous Brands
Shares plummet nearly 30% in the past seven months after earnings warning spooks investors
In January this year, Gourmet Burger Kitchen ran a promotion giving away free lunches to celebrate Blue Monday in the UK. A few months later, the chain gave away free cheeseburgers to all London Marathon runners - there were more than 40 000. In June, it gave away another 4 300 of its Big Mouth burgers nationwide, again for free. And this month, in response to the misery Brexit has caused, GBK will run a special promotion, giving the first 50 people who present their EU passport a brisket burger for free. As promotional activity seemingly becomes a survival tactic for the burger franchise, its South African parent, Famous Brands, lost about R1.3-billion of its market capitalisation this week. Investors were spooked by a dire trading update that warned that headline earnings per share may fall as much as 63%, mainly as a result of its UK struggles. Since April, the group, which owns local mainstays Steers and Debonairs, has had its share price lose almost 30%.Shareholders exit While ...
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