Eagle Boys owes tens of millions of dollars to creditors, although the private equity owner of the pizza chain has emerged as the largest unsecured creditor.
The Eagle Boys head office collapsed into voluntary administration on July 14 and administrators SV Partners have already closed 13 company-owned stores.
As Eagle Boys franchisees continue to trade around the country, creditors of the five related businesses that are in administration met for the first time on Tuesday.
The extent of the business’s debts was revealed at the creditors’ meeting, according to the Courier Mail, which reports Eagle Boys head office owes $30 million to creditors.
Of that figure, $7 million is reportedly owed to Fusion Food Group, which is made up of Eagle Boys and coffee chain Degani, both of which are owned by private equity firm NBC Capital.
The first meeting of Eagle Boys creditors comes as data from Roy Morgan Research shows the chain’s customer base has been in free fall.
While the total number of Australians ordering takeaway pizzas has not changed dramatically over the past four years, the preferences among these consumers has.
According to the research, close to 5 million Australians aged 14 and over visited or ordered from a pizza shop in an average four-week period in the 12 months ending March 2016, which compared to approximately 4.8 million in March 2012.
In 2012, some 1.8 million people were buying pizza from Domino’s, while 1 million ordered food from Pizza Hut and around 850,000 were customers of Eagle Boys.
In 2016, the customer base of Domino’s has increased to approximately 2.3 million diners, compared to 745,000 for Pizza Hut.
The number of diners ordering from Eagle Boys in an average four-week period is now at 336,000, according to Roy Morgan.
Pizza brands with more gourmet offerings have also overtaken Eagle Boys, according to the research, with Crust Pizza now attracting 400,000 customers in a four-week period.
The research also found that diners who reported spending money with Eagle Boys were more likely to order food from other takeaway brands, compared to customers of the other pizza chains.
Eagle Boys customers were more likely to also purchase food from brands such as KFC, Red Rooster, Subway and Sizzler in an average four-week period, and a third reported also ordering food from Domino’s in the same time frame.
Angela Smith, group account director at Roy Morgan Research, said in a statement the takeaway sector in general has been experiencing a downward trend since 2012.
“The pizza sector has not been immune to this downward trend, with Eagle Boys’ recent collapse into administration a particularly high-profile example. Domino’s, on the other hand, has managed to swim against the prevailing tide and grow its store network and customer base,” Smith said.
“Domino’s strength lies in its clever use of technology at all stages of the ordering, delivery, pick-up and purchasing process: whether it’s allowing customers to place an SMS order using an ‘emoji’, providing an app to track a delivery driver’s progress, or offering a tech-enabled ‘fresh fast bake’ certification. It is no surprise that growing numbers of Aussies (including those who also eat at Eagle Boys) are taking advantage of its easy and convenient service.
In contrast, Smith says gourmet pizza chains such as Crust and Pizza Capers have been “carving their own distinctive niche in the market”.
“Like the countless gourmet burger bars that have sprung up in recent years, these smaller chains are offering an exotic alternative to the predictable and somewhat interchangeable menus of the major chains,” she says.
“Eagle Boys has been slow on the technological uptake, yet doesn’t stand out with its menu either. Over the last few years, increasing numbers of its customers have been eating at rival fast-food (and specifically pizza-focused) chains, making its current situation almost to be expected.”
SmartCompany contacted Eagle Boys but did not receive a response prior to publication.