Woolworths throws Pie Face a lifeline
quick-meals chain Pie Face is in talks with Woolworths to sell its smiley-face pies from the freezer aisle in an attempt to increase gross sales and reduce manufacturing costs. Trials have been beneath approach in 15 Woolworths outlets and Pie Face and Woolworths are expected to make a decision early next 12 months whether or not to extend the rollout of frozen take-dwelling pie packs. the possible supply agreement with Woolworths is one of several methods into account because the eleven-year old firm – which has attracted greater than $35 million in funding from high-profile investors – fights to survive.
Wayne Homschek. photo: Andrew Quilty Pie Face founder and main shareholder, former Citigroup banker Wayne Homschek, appointed accounting and advisory agency Jirsch Sutherland as administrator late final month and is making an attempt to restructure and refinance the company, which owes creditors greater than $20 million. After closing 17 firm-owned retailers and two franchised stores last week, Pie Face directors and management are actually in talks with landlords to scale back hire prices on closing stores. Pie Face can also be looking at how to reduce prices and improve production in its Rosehill factory and reduce the price of items for franchisees, a few of whom have complained that costs are too excessive. Franchisees, collectors and investors at Pie Face’s first collectors meeting on Wednesday had been instructed that weekly outgoings throughout the crew were nonetheless exceeding sales with the aid of about $150,000, in keeping with the newest data. creditors will meet again on December 30, during which time the collectors should have a clearer picture of Pie Face’s property and liabilities. it’s understood Macquarie Capital, the only secured creditor, is owed $4.2 million, convertible notice holders $7.5 million and the tax place of business $7 million. but these money owed are dwarfed by intercompany loans of $33 million, the standing of which is unknown. The loans are owed by the operating company, Pie Face Pty Ltd, to the preserving company, and were presumably taken out to prop up the business. Jirsch Sutherland is on the lookout for a buyer for the whole trade and can also be searching for financiers to take over the Macquarie Capital debt, which is secured over property together with shares in Pie Face Holdings Pty Ltd, $three.5 million money at bank and shares that Pie Face holds in Pie Face Inc, america business. New Pie Face chief executive Kevin Waite said he used to be sure the company would live to tell the tale and no extra retailer closures had been deliberate. “i would not be here if I failed to imagine this firm had a future,” Mr Waite said. “we’ve a tough month to move via with the administration process however there is every purpose to imagine our franchisees and this brand have a future.” Mr Waite used to be confident a supply handle Woolworths would not cannibalise gross sales for franchisees. “the client generally going right into a Pie Face for hot pies doesn’t swap their buying social gathering by using buying a frozen pie for diner,” he said. “we are going to be sure it is a different purchasing celebration. Our franchisees are in the beginning in everything we do.” smh.com.au trade information.
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