Pastry maker Grain D’Or was a loss-making business, despite a range of schemes used to try to improve profitability, Finsbury said. A formal consultation with the manufacturer’s workers was launched, Finsbury revealed today (August 23).
A Finsbury statement said: “The company has proposed the closure of Grain D'Or as the business has been historically loss making. In recent years, the company has implemented a range of initiatives to improve the business including strict cost controls and introducing new working practices.
‘Overall operating loss’
“Despite this, during the 12 months to July 1 2017, Grain D'Or generated £28.5M in revenue, but produced an overall operating loss.”
Grain D’Or has two sites in London, and employs about 250 people. It produces pastries, American muffins and speciality breads. It was one of the major importers of Normandy butter and Canadian blueberries, according to Finsbury.
News of Grain D’Or’s closure came a month after Finsbury said deflation had impacted its sales. It reported a 1.1% fall in like-for-like sales in constant currency, during its financial year to July 1.
But, despite the closure of Grain D’Or, the manufacturer was still well-equipped to deliver growth in the near future, claimed Finsbury.
‘A strong multi-channel business’
“Finsbury is a strong multi-channel business and a large diversified speciality bakery group. As outlined in its recent trading update, on July 17, the group is performing well.
“The board believes that despite the current pressures on the industry, it is well-equipped to maintain its market leading position and continue to deliver growth and improved shareholder value over the period ahead.”
Finsbury bought Fletchers Group of Bakeries – including Grain D’Or – in 2014, for £56M from private equity firm Vision Capital. At the time, Finsbury said the acquisition would offer a multi-channel platform for further acquisitions.