Yes it’s a black hole, but it might as well be Gold Brands

Business

Yes it’s a black hole, but it might as well be Gold Brands

More companies should think before they list. Once listed, there is no guarantee of quality. Buyers beware

Giulietta Talevi


The departure of Gold Brands Investments’ CEO, Praxia Nathanel, from the company she helped found has been met with utter indifference by the market.
Gold Brands shares did not trade on Tuesday, and have flatlined at 19c a share since August last year, when the company began selling off the fast-food names it had bought in a post-listing frenzy. That culminated in this year’s sale of the main reason it went public: the Chesanyama brand on which Nathanel and husband Stylianos were set to build another quick-service restaurant empire in the vein of Famous Brands or Spur.
Well, Chesanyama went for the princely sum of R14m. Before that, it was the Black Steer franchise, which Gold Brands offloaded for R3.2m.Gold Brands is now in the process of outsourcing all its production and logistics facilities to “simplify” the business.In short, this has been a managerial implosion of fairly catastrophic scale in three short years, if you consider that the company listed at 112c in 2016, and in its first year as a public entity made revenues of R235m.
While Gold Brands did manage to draw a few credulous buyers, its numerous “ventures” never came to fruition. Remember that 2016 memorandum of understanding to take Chesanyama to the US? Or how it was going to bring UK franchise Harry Ramsden’s to SA?
So what are the lessons here, besides the obvious conclusion that more companies should think before they list? Once listed, there is no guarantee of quality. Let the buyer beware.

This article is reserved for Times Select subscribers.
A subscription gives you full digital access to all Times Select content.

Times Select

Already subscribed? Simply sign in below.

Questions or problems?
Email helpdesk@timeslive.co.za or call 0860 52 52 00.