Damian Griffiths has sold Doughnut Time to Dan Strachotta, the former CEO and managing director of the company.
The chain had 30 stores in Australia and the UK at its peak, but has closed the majority of its outlets across Australia, leaving just seven stores operational.
In Brisbane, the South Bank and Clayfield locations will remain open along with the Gold Coast’s Mermaid Beach shop. Melbourne will keep outlets in Degraves Street, Fitzroy and Chapel Street while Sydney will be left with just one store in Newtown.
Griffiths has attributed Doughnut Time’s demise to rapid expansion.
“I am accepting the blame, I expanded too quickly,” he told Broadsheet. “I guess I had too many big ideas and dreams when I started the development of Limes [Hotel], [Alfred & Constance] and then expanded Doughnut Time around Australia.”
Griffiths has been run into financial ruin over the past few months after he lost control of a number of his venues including KTG Bakeries, the Limes Hotel and Alfred & Constance over unpaid debts and money owed to the ATO. Griffiths sold Les Bubbles restaurant to Strachotta before the Bubbles Bar and Bistro company went into liquidation in February.
February was a chaotic month for Griffiths, after it was reported 35 staff members from Doughnut Time took the chain to Fair Work, alleging they were underpaid more than $70,000.
Griffiths is also facing a $404,000 lawsuit filed in the Supreme Court by Frasers Property, landlords of Central Park Mall in Chippendale, over a breach in contract and unpaid rent after Doughnut Time left the premises.
“[It’s] the classic example: us taking a space in Central Park,” Griffiths says. “[There were] lots of promises only [for us] to find out it was a ghost town.”
Moving forward, Strachotta will move Doughnut Time’s focus to online platforms and working with delivery partners. He will also be offering jobs to as many current staff as possible.
“I’ve taken on some of the stores that I believe can recover from a very tough retail market and as part of that I intend to work with a different strategy focused more on online platforms and delivery partners rather than actual shops,” he told SMH.
“It’s a great brand and a great product and I’ll be doing everything I can to make the brand successful again.”
Griffiths has admitted he’s being forced into bankruptcy and there is “no point fighting anymore”.
“I had a go and made lots of mistakes,” he says. “I’m not after anyone’s sympathy. I will accept the blame but there [are] lessons for others in the food and beverage industry.”
Image credit: Gareth Sobey