Monday 6 July 2009

Coffee Republic heads for administration

Coffee Republic has put one of its subsidiaries 'GoodBean' into administration and shares in Coffee Republic were suspended at the request of the business today, pending “clarification of the company's financial position”.

Quite a surprise as Coffee Republic as the company had announced in December that it was free of bank borrowings and expected to become earnings positive by the end of the financial year for the first time in the company's history.They have some 220 outlets.

Coffee Companies were one of the major reasons for spiraling rents on the highstreets in the 1990's. A Coffee chain works on a huge profit/low overhead cost basis. Coffee bars work on location, location, location. The chains reasoned that any rent was worth paying to secure the volume of customers necessary, in the location deemed most desirable to take a slice of the sandwich market.
They bid high and in a short time significantly pushed up the rents on the prime sites, causing increases all the way down the marketplace for everyone. So its a little ironic that..

The company Chief executive Steve Bartlett said that the PLC remained viable but that the board had begun a restructuring programme in order to shed onerous leases for a number of its UK outlets that it was no longer able to support.

Legal week don't fancy their chances much.
Bristol corporate partner Paul Cooper and head of restructuring and insolvency Nigel Boobier, have been brought in to advise the company in relation to its potential collapse.

Its still tough all round. Our old favourite JJB
has been forced to confirm that it is looking to raise at least £50 million in capital to fund its turnaround plan; and to add further questions to an already troubled company chairman Sir David Jones borrowed £1.5 million from the billionaire Mike Ashley.


dearieme said...

Is the "the billionaire Mike Ashley" any relation to the former billionaire Mike Ashley, the football guru?

Mark Wadsworth said...

Is the company's president going to be dragged off in his pyjamas?

Bill Quango MP said...

I think old Mike is still a billionaire.Just.

Anonymous said...

Pity. I actually liked the coffee .....

banned said...

Good, high time they and other rubbish coffee shops stopped cluttering up our High Streets, we already had a few traditional ones so they won't be missed.

asquith said...

Banned- the disappearance of shite from the High Street is only to be welcomed if something better replaces them.

I'd like to see what becomes of all these ex-Woolworths, etc, once the recovery is under way. I can't say I hold out any great hope.

banned said...

Asquith, my High Street has just one shop that is not a Chain Store of one sort or another ( inc 'Label' Coffee Shops ).
That shop is an independent tobacconist that has been there since year dot but such is the fury of the Tobacco Free World lobby that it now hides behind the facade of a ( you guessed it )
Coffee House when in reality it still supplies excellent tobacco, cigarettes, cigars and snuff to those who know.