The harsh taste of COVID-19 on Famous Brands

Famous Brands, the owner of popular South African restaurant chains such as Steers and Tashas, has announced the scrapping of its dividend for the second half of the financial year in a bid to protect its balance sheet. The company's CEO, Darren Hele, highlighted the significant negative impact of the COVID-19 pandemic on the group's operations. In a recent interview with CNBC Africa, Hele discussed the challenges the company is facing and outlined its strategies for navigating through the crisis. He emphasized that while the road to recovery will be tough, Famous Brands is confident in its ability to bounce back. Hele acknowledged that the pandemic has already impacted the business but expressed optimism about the positive impact of moving into Level 4 and Level 3 of lockdown restrictions. He reassured stakeholders that Famous Brands possesses strong brands and a solid business model that will help it weather the storm. With a focus on recovery, the company is prepared to adapt to the changing consumer habits post-pandemic. Famous Brands is banking on consumer trust and comfort in dining out to gradually return, despite the challenges of social distancing and capacity constraints. The company has also implemented cost-cutting measures to preserve its balance sheet, including halting manufacturing and logistics projects and reevaluating its capital expenditures. As the restaurant industry faces uncertainty, Famous Brands is considering potential consolidation and strategic repositioning of its brands to ensure long-term sustainability. The CEO acknowledged the need for industry players to lobby for support and engage in dialogue with the government, while also recognizing the complexities of managing a business during a global pandemic. Famous Brands remains optimistic about the future, emphasizing the importance of resilience and adaptation in overcoming the current challenges.