Coffee Republic faces new regime
Jul 8 2009 by Iain Laing, The Journal
COFFEE and deli chain Coffee Republic has succumbed to the high street squeeze and called in administrators.
The group has 153 directly-employed staff, of whom 26 are at head office in London and 127 at 20 group-run bars.
Administrators at KPMG are assessing the viability of individual outlets but warned job cuts were inevitable at loss-making shops.
The group has 187 in total in the UK and overseas, including 70 franchises and a further 97 concessions in cinemas, stores and hotels. These are not affected by the administration. Partner Richard Hill said: “The recession is hitting discretionary spending on the high street and some of the less profitable bars with expensive leases have suffered. However, Coffee Republic has a strong brand and I expect considerable interest in the profitable parts of the business.”
KPMG has been appointed to Coffee Republic (UK), Coffee Republic Franchising and Goodbean, although holding company Coffee Republic plc is not in administration.
Coffee Republic was formed by brother and sister Bobby and Sahar Hashemi. Their first coffee bar opened in 1995 in London’s South Molton street, near Bond Street. Mr Hill said: “We will be doing whatever we can to find a buyer for the residual business as a going concern as quickly as possible, so interested parties will have to be prepared to move fast.”
The collapse into administration represents a turnaround from the more bullish comments from chairman Peter Breach last December.
Despite losses of £527,000 for the six months to September 28, Coffee Republic cleared its debts by paying off its £3.3m bank borrowings. Mr Breach said that would save it £200,000 a year, but last Friday the group warned of impending administration.
