Coffee Republic hit by the daily grind
COFFEE Republic yesterday suspended its shares “pending clarification” of its financial situation, with administrators waiting in the wings.
Last week, the group placed one of its subsidiaries into administration and called in restructuring advisers from law firm Osborne Clarke.
The company, which was founded by Bobby Hashemi, suffered a £527,000 loss in the six months to 28 September but said that it was successfully free of bank debt.
It has about 200 stores worldwide including franchises and independent outlets.
Shares in Coffee Republic, which have lost two thirds of their value over the last twelve months, closed last Friday up two per cent at 22p, valuing the business at £2.8m.
Steve Bartlett, a former rebel shareholder who became chief executive last year, said that the chain hoped to rid itself of poorly performing stores in a restructuring programme.
Analysts say that the fact that Coffee Republic is not as strong a business as rivals like Starbuck has been exacerbated by the downturn.
BOBBY HASHEMI
FOUNDER OF COFFEE REPUBLIC
Bobby Hashemi may need to re-read his own business totem: “Anyone Can Do It: Building Coffee Republic from our Kitchen Table”, the book he co-authored with his sister Sahar.
The siblings formed the Coffee Republic chain in 1995 after the pair said they couldn’t find a British coffee as strong as that in New York.
Hashemi, who once dated former Spice Girl Geri Halliwell, previously worked in mergers and acquisitions for Lehman Brothers.
Hashemi was ousted from the group in October 2007 by chairman Peter Breach and chief executive Steven Bartlett after the brand’s rapid expansion.