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As if dealing with an ongoing stoush between investor factions over a loan to its majority owner Keybridge Capital (ASX: KBC) weren't enough, struggling confectionery group Yowie Group (ASX: YOW) has been hit with a triple whammy of challenges in its main market, the US.
Today the company revealed that its North America country manager Leo Valle would be retiring from 30 April, after announcing a major customer would be recalibrating store layouts to give Yowie products "materially fewer store facings effective immediately".
Based on historical sales, Yowie expects the change in store presence will result in up to US$1.9 million in lower revenues annually - or around 13 per cent of the $14.7 million in sales revenue the group recorded in FY24.
Despite manufacturing its US-distributed product in-market, the company revealed a negative impact is likely from the new tariffs announced by US President Donald Trump, given it sources inputs from around the world.
"The two material inputs are chocolate and toys. The latter Yowie sources from China, spending an estimated US$2.5 million a year," Yowie said.
"The announced 54 per cent aggregate tariff on Chinese goods entering the USA are likely to have a significant impact on Yowie’s cost base.
"Yowie is assessing alternative sourcing options, including any manufacturing options within the USA for its toys, however there can be no certainty that such arrangements can be implemented."
These updates come as uncertainty hangs over Yowie regarding a $4.6 million loan to its majority shareholder Keybridge, which called in administrators in February after a sub-committee of the Yowie board demanded an urgent repayment.
At the time Keybridge and Yowie both shared a CEO, Nicholas Bolton, who has since been ousted from the Keybridge board by Geoff Wilson's WAM Active (ASX: WAA) following a NSW Supreme Court ruling in proceedings brought by WAM.
The announcement of Bolton's directorship removal on 1 April did not, however, include any management changes.
Yowie is now claiming it is owed $6.7 million by Keybridge.
"The company has been informed that a deed of company arrangement has been proposed by Mr Nicholas Bolton, under which Yowie would receive 100 cents in the dollar within 21 days of implementation, subject to creditor approval," the company revealed today.
"Separately, WAM Active Limited are proposing to fund creditors of Keybridge by way of a loan, however details of which and the ability to fund are uncertain."
The group also announced today that in order to enhance governance, "in particular in relation to resolving its recovery of a very material debt from a related party", Yowie has appointed two independent directors - Diesel Schwarze and Daniel Agocs.
Schwarze, described by Yowie as an experienced advertising director, is said to have worked with prestigious global brands including Chanel, Louis Vuitton and Sony, and is expected to bring "exceptional brand storytelling and creative input and creative input aligned with Yowie’s consumer-focused growth strategy".
Agocs is said to have significant operational experience in logistics, manufacturing, and wholesale sales.
"His input and experience come at an appropriate time as Yowie navigates increasingly complex global supply chain challenges and looks to diversify its wholesale reach," Yowie states.
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