Breadtalk group CEO Henry Chu has resigned for “personal and health reasons”, it was announced on Wednesday.
Chu, 49, will leave at the end of the year, with company founder and group executive chairman George Quek acting as interim CEO until a new one is appointed.
Quek, 62, said: “On behalf of the board, I would like to thank Mr Henry Chu for working tirelessly with the senior management team to maximise growth opportunities and successfully diversify our portfolio of brands in the last two and a half years.”
Chu has been overseeing the company’s global operations and will continue in this role during the transition period.
The company spokesman said Chu will take time off to rest after leaving the firm, as he has been “travelling extensively for work over the last couple of years and it has taken a toll on him”.
Quek noted that under Chu’s leadership, the food empire entered partnerships with notable brands such as Wu Pao Chun Bakery and Song Fa Bak Kut Teh, and expanded into new markets, including London and Cambodia.
Chu, who has more than 20 years of experience in food and beverage and retail in Singapore and the region, rejoined BreadTalk as group managing director in October 2016 before taking over as group CEO less than a year later. He had previously served as CEO of BreadTalk’s bakery division.
Before joining BreadTalk, he was director of operations at Delifrance and operations director with Starbucks in Thailand and China.
BreadTalk said it will look inside and outside the firm for a new CEO.
DBS analyst Alfie Yeo said there is unlikely to be significant changes to BreadTalk’s operations, as the company has a strong management and organisation set-up.
Yeo noted that Chu was involved in setting up BreadTalk’s 4orth division, which encompasses food concepts and both self-owned and franchised brands, including So Ramen.
Yeo said: “The 4orth division has yet to be profitable, but it is notable that the So Ramen brand itself is already operationally profitable.”
He added that BreadTalk’s earnings have been hit by a mix of weak bakery performance, particularly in China, and lower franchise income, as well as higher start-up costs on opening new outlets for the 4orth division and its Din Tai Fung outlet in London.
Yeo said weak bakery performance in China and start-up losses from the 4orth division will continue to take its toll on earnings this year.
Associate Professor Lawrence Loh of the National University of Singapore told the Straits Times that BreadTalk’s bakery division – which accounts for most of its business – has seen declining revenues over the last year, noting that there are a lot of competitors operating in the industry.
“In the traditional bakery space, consumers might be jaded by the company’s offerings,” Loh said.
“They [BreadTalk] could try to cater to changing tastes, and perhaps find new products that are more niche or creative.”
The BreadTalk empire has close to 1,000 outlets worldwide under an array of brands, including Toast Box, Food Republic and franchise partners like Din Tai Fung and Song Fa Bak Kut Teh.
Earlier this month, BreadTalk reported a fall in second-quarter net profit due to rising costs.
Earnings fell 57.9 per cent year on year to $1.02 million for the three months to June 30, despite a 9.8 per cent growth in revenue to $163.3 million.