The embattled owner of Donut King and Gloria Jean's will attempt to deal with declining sales by closing as many as 200 outlets, cutting costs, and reviewing its business model.

Retail Food Group (RFG) posted a net loss after tax of $87.8 Million for the first half due to $138 Million in writedowns and provisions and "difficult trading" conditions.  The company owns Brumby's, Donut King, Crust Gourmet Pizzas, Michel's Patisserie, and Gloria Jean's.  It plans to close 160 to 200 stores by the end of 2019 because of declining sales and unsustainable rents.

"We have had to make some tough decisions about our business model, our franchise network and the value of some of our assets," said RFG's Managing Director Andre Nell, as quoted by Business Insider Australia.  "The key to improving our performance is to simplify what we do.  We have all the assets we need to deliver our diversified business strategy - now we need to make sure we make the best use of those assets."

"RFG's future profitability and growth is directly linked to the health and sustainability of its franchise network, and it is clear from the review process that RFG needs to reset its business model and enhance its support to franchisees,"said Mr. Nell.