New Max Brenner owner plots rapid chocolate store expansion

The owners of Max Brenner are plotting to expand again.

Property developer Arnold Vitocco says his family’s land sales business experienced a “tripling” in the number of interested buyers visiting the company’s display suites in fast-growing southwest Sydney last Sunday after the coalition’s election win.

Vitocco, a member of The List of Australia’s Richest 250 people, told The Weekend Australian he saw an immediate upturn in sentiment for property buyers.

“A lot of people had some more confidence,” he says. “It was about the continuation of the same government and I think the combination of the RBA saying it might cut interest rates and the [potential] end of the 7% target for borrowers will also help.”

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Vitocco’s family development business has about 8000 housing lots for development in the southwest, where he has built a $750 million fortune that includes owning the hugely successful Narellan Town Centre near Campbelltown, 60km southwest of the Sydney CBD, with billionaire Tony Perich and his family.

Narellan is considered the biggest private family-owned shopping centre in Australia, with $550m in moving average turnover annually in 72,000sq m of retail space.

It is a far cry from when Vitocco and Perich sealed the partnership with a handshake over the bonnet of Vitocco’s car after he had bought five acres of land in 1989.

The Vitocco and Perich families would like to extend that space to 110,000sqm and build apartments and potentially even a hotel to link with a planned new railway station nearby, all of which is subject to council approval.

“We’re probably in the fastest-growing area in Australia at the moment, and we’re only 10km from the new airport at Badgerys Creek,” Vitocco says.

“So there is a lot going on here and people really want to buy around here.”

Developer Arnold Vitocco with his national marketing manager Michael Knudsen, left, and NSW area manager Nadar Salomon. Picture: Jane Dempster.

But Vitocco has also turned his attention to another business pursuit which, like the residential property market, he hopes will experience a rapid turnaround in performance. He and business partner Roy Mustaca, owner of United Cinemas, last year rescued the Max Brenner chocolate retail franchise from receivership, inheriting almost 20 stores and about 350 staff around Australia. They now have big plans to expand the business across Southeast Asia.

Vitocco says he wants to open five to 10 new stores every year and build the Australian business quickly back to its peak.

But he is even more excited about Max Brenner’s potential overseas and is in negotiations to establish franchises in Mumbai and Delhi. It is the start of a push by his brand into Asia after clinching the rights to markets such as India, Japan, China and Singapore as part of a deal to rescue the Australian business.

Max Brenner was started in Australia by husband and wife team Tom and Lilly Haikin, who started with one shop in Sydney’s Paddington in 2000. They built a chain that Vitocco says numbered 55 stores at its peak.

But it would run into financial trouble as costs increased and the business was placed in administration last October, owing more than $33 million to creditors before liquidators were appointed. They closed 20 stores and put the remaining 17 up for sale.

Vitocco and Mustaca then took on what remained, and have quickly started expanding.

Their refurbished store in Sydney’s Blacktown has increased its revenue by 25% in four weeks with a revamped menu featuring 20 new chocolate, praline and giftware products, including ruby chocolate and vegan-friendly items, Vitocco says.

“We fell in love with the brand and the concept when we got it into Narellan, where we thought it was a good fit,” he says. “My wife Irene has worked in cafes and retail and helped with the negotiations to get it into Narellan.

Max Brenner chocolate Townsville

The final day of trading for Max Brenner in Townsville.

“So we thought it was worth looking at when it ran into difficulty. I’ve always been a builder, pouring concrete and the like. It is a bit different, but for us is about diversity in what we invest in. And we think with the right foundation we can really grow the business.”

Vitocco says the Australian business needs to get bigger.

“We are profitable now, but in this business you need scale, so you probably need 30 to 40 stores to make it worthwhile,” he says.

But it is Asia that Vitocco believes presents the best opportunity. Max Brenner in Australia has clinched a deal with Swiss giant Barry Callebaut to make specific products for it in Singapore, which Vitocco’s firm also sells to other cafe chains in Australia.

Vitocco has also travelled to Japan, where there are five existing stores that need revamping after straying from the original concept and introducing alcohol and hamburgers to the menu, and elsewhere around Asia after gaining rights to the market from the global brand’s Israeli owners.

“There’s just nothing like Max Brenner in these sorts of markets and I think people are crying out for something like that there,” he says. “We’re in final negotiations with eight to 10 parties to take on franchises in Mumbai and Delhi, and they’re both markets of 45 to 50 million people.

“It is an emerging market that we think is untapped for this kind of concept. No-one is really doing that full-line chocolate and dessert bar offering, as well as the praline and gifts too. ”

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