Berjaya Food Exits Paris Baguette Joint Venture, Redirects Focus on Core Businesses

Berjaya Food, a major player in the food and beverage industry, has concluded their collaboration with Paris Baguette, marking the end to the alliance that brought the esteemed South Korean bakery chain to Malaysia in 2023.

In an effort to sever ties with the financially draining venture, Berjaya Food divested its 50% share in Berjaya Paris Baguette (BPB) to Paris Baguette Singapore for a token sum of RM1 (US 24 cents). Executed on June 30, this transaction included the transfer of 20 million ordinary shares. This was accompanied by Berjaya Food’s settlement of RM3.91 million (about $960,920) in outstanding liabilities.

A Challenging Operation

The Malaysian branch of the business has persistently reported losses since its commencement. As per recent records, BPB reported an unaudited, post-tax loss of RM67.09 million ($16.49 million) and net liabilities of RM33.41 million ($8.2 million). The RM20 million ($4.9 million) pumped into the venture by Berjaya Food is fully impaired.

Berjaya Food has clarified that the divestiture of BPB is a strategic move to step away from the “Paris Baguette” chain of bakery and retail stores in Malaysia, which has continually underperformed since its introduction in the country. This decision, they explain, will help to eliminate the group’s exposure to BPB’s continuous financial losses.

Looking Ahead

Berjaya Food can now channel its resources and managerial attention to its principal businesses and future growth prospects. Paris Baguette, on the other hand, first set foot in Malaysia in 2023 and currently manages 16 locations across the country.

Berjaya Food’s decision to divest comes at a time when the group is grappling with wider earnings pressure. Last year, the company reported its fifth consecutive quarterly loss, largely contributed by weaker performance at its Starbucks Malaysia business.