GenMont Biotech Inc (景岳生物科技) yesterday found a buyer for White-Wood-House Foods Co Ltd (白木屋食), its bakery franchise that has been mired in the red for years.
Supermarket chain operator Pxmart Co Ltd (全聯實業) is to wholly acquire the ailing bakery in a NT$792 million (US$26.56 million) deal, GenMont said.
GenMont said it expects to book NT$99.04 million in disposal gains from the sale after halting the bakery chain’s operations last month.
Local media have estimated that the company might have accumulated losses of more than NT$500 million from its venture into the bakery market.
“There is little chance of a turnaround,” company spokesperson Maggie Wang (王美玲) said at a news conference at the Taiwan Stock Exchange.
In a separate statement, Pxmart said that the acquisition would aid an ongoing collaboration to supply bread to a bakery business in collaboration with Hankyu Bakery.
Acquiring White-Wood-House’s baking equipment and production bases would also help its efforts to expand the supermarket chain’s footprint in the bakery segment, it said.
Pxmart has long held off building its own bakery facilities, it said.
GenMont, one of Taiwan’s leading probiotics makers, acquired White-Wood-House in 2014 while the bakery franchise was still reeling from a plasticizer food scare in 2011.
The company hoped to leverage its expertise in probiotics to create a new line of healthy food products for the Chinese market.
Founded in 1997, White-Wood-House’s profit came under pressure from competitors ranging from Web shops and smaller specialty bakeries to a growing number of hobbyist bakers.
Apart from rising labor and rent expenses, the bakery franchise was also hampered by a narrow product mix focused on birthday cakes and an unclear brand identity.
GenMont said that it would meet all severance requirements and pay all labor violation fines for the estimated 200 bakery employees.
Whether affected employees would be rehired by Pxmart is up to the bakery’s new owner, GenMont added.
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