The Final Nail in the Coffee?

Coffee Republic slips into administration.

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Yesterday, Coffee Republic went into administration after weeks of speculation about its future. Administrators KPMG said there would be “inevitable job losses” at the coffee company, which was founded by brother and sister team Bobby and Sahar Hashemi in 1995.

Although the Coffee Republic Plc holding company has not gone bust, its three subsidiaries, Coffee Republic (UK), Coffee Republic Franchising Ltd and Goodbean Ltd have all been placed in administration. The company suspended its shares yesterday “pending clarification” of its financial position.

KPMG have released a statement, saying that they hope to sell on some of the company’s profitable franchises and outlets.

There are 187 Coffee Republic-branded cafes in total in the UK and overseas, including 70 franchises and a further 97 concessions. This includes shops in Hammersmith, Fulham, Ealing and Wandsworth. Some of these cafes were in cinemas, proving the stark reality of the situation - people won't even buy coffee to drink during a film.

This is a worrying time for coffee companies, as consumers are tightening their purse strings and expensive coffee is not selling. This, coupled with expensive leases on high street shops, make for worrying times for coffee chains. With the current economic climate looking as bad as it does, and no signs of imminent improvements, how long will it be before we lose another big chain?

 

Jack Collins

July 8, 2009