Coffee Republic hopeful of turnaround

Coffee and deli bar operator Coffee Republic today reported wider losses, as it posted its first set of annual results since the chain’s founder was ousted in a boardroom coup.

The group said it sunk £1m (€1.4m) deeper into the red, with net losses of £2.45m (€3.62m) for the year to March 25, against £1.45m (€2.14m) last year.

But chairman Peter Breach and chief executive Steven Bartlett – major investors who were voted in to replace co-founder Bobby Hashemi at an extraordinary general meeting last October – asked shareholders to put faith in the company’s strategy, which will see most stores run as franchises.

The new management said its “Coffee Republic Served Here” initiative was also moving ahead, with a franchise agreement signed with pub operator Greene King for 26 locations, plus pilots under way with groups such as RoadChef Motorways.

Chairman Peter Breach said: “As expected, the results show a widening of losses, but only include five months of activity since the changes in strategy.

“It will take time for these changes in strategy to have a meaningful influence on financial performance.”

Coffee Republic now has 71 bars across the UK, up 58% on last year, with the number of franchised outlets having almost trebled, from 14 last year to 31.

The new board said it had “accelerated” the franchising programme put in place by Mr Hashemi, who founded the business with his sister Sahar in 1995.

London-based Coffee Republic, which listed in 1998, began struggling after the economic and tourism downturns of 2001 and revival plans put in place failed to halt the group’s mounting losses.