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FAMOUS BRANDS LIMITED - Famous Brands Savours Greek Cuisine Acquisition - Advancing the Groups Presence in the Evening Casual Dining Catego

Release Date: 09/11/2015 07:05
Code(s): FBR     PDF:  
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Famous Brands Savours Greek Cuisine Acquisition - Advancing the Group’s Presence in the Evening Casual Dining Catego

FAMOUS BRANDS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
JSE Share code: FBR
ISIN code: ZAE000053328
(“Famous Brands” or “the company”)

FAMOUS BRANDS SAVOURS GREEK CUISINE ACQUISITION - ADVANCING
THE GROUP’S PRESENCE IN EVENING CASUAL DINING CATEGORY

Progressing the Group’s stated strategy to expand its presence
in the evening casual dining environment, Famous Brands has
acquired a 51% stake in contemporary Greek restaurant chain,
Mythos.

The purchase consideration falls below the threshold of a
categorised transaction in terms of the Listings Requirements
of the JSE Limited and will be settled from cash reserves.
All conditions precedent have been fulfilled and the effective
date of the transaction is 1 November 2015.

Famous Brands’ Group Chief Executive, Kevin Hedderwick, says,
“In line with our goal to compete more vigorously in the sit-
down evening casual dining category, we have been actively
exploring acquisition targets which align with our best-in-
class criteria. The Mythos brand ticks all the boxes. This
acquisition provides a significant opportunity to boost our
offering in a market segment where we are under-represented
and which affords strong growth potential for our business.”

Mythos was launched in 2006 by founder George Kutra. The
original restaurant was opened, and remains, in the Design
Quarter in Fourways, Sandton. Today the Mythos chain
comprises six additional restaurants located in a range of
high-end malls in the greater Johannesburg and Pretoria area:
the flagship restaurant in Bedford Square (Bedfordview); Irene
Village Mall (Pretoria); Brooklyn Design Square (Pretoria) ;
Cradlestone Mall (Krugersdorp); Monte Casino (Sandton) and
the recently opened Mall of the South (Johannesburg).

Hedderwick says, “In the South African context, Mediterranean,
and especially Greek cuisine, is a category traditionally
dominated by small, independent operators.    Mythos is unique
insofar as it comprises of a chain of restaurants, has a
strong well-established brand profile, and enjoys a large, and
growing, customer base.”

“The brand’s loyal consumer following is evidenced by its
awards for ‘Best Greek Restaurant’ in the 2013, 2014 and 2015
Leisure Options Readers’ Choice Awards,” he notes.

Hedderwick outlines the compelling rationale for the
transaction:

“Mythos’s target audience is upper-LSM consumers, a market
segment which has consistently proved its resilience in the
current weak economic conditions. The research derived from
our other premium brands illustrates that customers with
robust disposable income remain enthusiastic spenders.
Mythos is well positioned to capitalise on this trend with its
authentic cuisine, stylish décor and personalised service,
which combine to provide an aspirational contemporary dining
experience.”

He adds, “There is substantial opportunity to expand the scale
of this business from a regional to a national offering.
Mythos’s footprint is currently confined to the greater
Johannesburg and Pretoria area and our intention is to roll
out the brand nationally in due course.”

Hedderwick says, “A key component of our investment rationale
is that the existing trading restaurants have delivered an
impressive multi-year track record in terms of turnovers,
margins and profitability; as such, Mythos offers a compelling
investment proposition for prospective franchisees.”

“Furthermore, there is an immediate upside to the transaction
in that we will vertically integrate components of Mythos’s
business which are currently outsourced into our Famous
Brands’ business model. This includes functions such as
procurement, manufacturing, distribution, and restaurant
development and design,” notes Hedderwick.

As with Famous Brands’ other JV partnerships, the services of
the founder-owner, George Kutra, and his management team will
be retained.  Hedderwick comments, “Having conceptualised
Mythos almost ten years ago, George has a passion for and
commitment to growing the brand to its full potential, which
will be facilitated with our support.”

George Kutra says, “Famous Brands was created by a family of
entrepreneurs and today still embraces the entrepreneurial
spirit which we admire. My father was an entrepreneur from a
young age, and during our own childhood, my sister and I would
help him in his stores, which is likely where our work ethic
and passion for owner-managed business comes from. Today my
family remains extensively involved in Mythos: my sister,
Helen, has been instrumental in helping me grow the brand; my
mother, Irene, is key in bringing her traditional Greek
recipes into our kitchens; and my father, Dimitri, tirelessly
oversees our operations at our flagship Bedford Square
restaurant.”

He adds, “We are very excited to be offered the opportunity to
partner with Famous Brands, the leading foodservices company
in Africa.    Thanks to their infrastructure and the respect
with which they are regarded in the industry, we are confident
that this partnership will be beneficial in helping us to grow
the Mythos footprint in South Africa and beyond.”

Kutra believes that the factors which underpin Mythos’s
leadership position in the category will be invaluable in
achieving the brand’s ambitious growth strategy. He says,
“Our restaurants are owner-managed by carefully selected
franchisees with unwavering high standards. While our
customers love the authentic vibrant Greek dining experience
which Mythos offers, it is the consistently high quality food
and service which sets us apart and will enable us to gain a
foothold in new markets across the country.”

Hedderwick concludes, “We are delighted with this acquisition.
Mythos has a distinctive, aspirational identity and stands out
in the cluttered evening dining category. Its best-of-breed
qualities and inherent expansion opportunities position this
brand for vigorous growth. Over the next five years we will
target a network of 30 restaurants nationwide.”

Midrand
9 November 2015

Sponsor:
The Standard Bank of South Africa Limited

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