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.