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gruffydd

In Memorium, Coffee Republic

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Surely they'll find some grounds to keep the coffee flowing?

Otherwise it could turn into a big legal fight over the remains of the company. Could go to court, maybe even involve some Baristas.

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I just don't know how I'm gonna get over this news :rolleyes:

Oh hang on. There we go.

Great news for all the idiots who pay £2 for something that costs no more than 5p. Not that they'd know.

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Excellent, we had one open in the high street about 3 weeks ago. Out of business already, cool.

p.s. I only use independent coffee shops, support your local businesses, feck chain stores.

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I just don't know how I'm gonna get over this news :rolleyes:

Oh hang on. There we go.

Great news for all the idiots who pay £2 for something that costs no more than 5p. Not that they'd know.

To be fair it's not just the coffee you're paying for - it's the chance to sit down in a nice place and have a rest. I remember Worcester before the coffee chains and all you had was pubs or the Giffard Hotel. Dire. I will lament the loss of the coffee shops - they're pubs for those who aren't alcoholics or football fans.

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Sad thing is they say it's franchises

So what went wrong? December’s statement provides a clue: the weakness of the franchise business model:

"The possibility of more stores being returned must remain an area of concern for all franchise businesses in the current economic environment but the raising of standards required of franchise proposals should reduce this problem in future."

Which just shows what everybody knew already, branding works, or rather people think it does.

An individual coffee shop in every town would be much more interesting, maybe even cheaper without franchise

costs. How hard can it be to make coffee and unwrap the outsourced food.

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How hard can it be to make coffee and unwrap the outsourced food.

Not hard at all.

But the founders expended most of their energy on rapid expansion, franchising, retrenchment, going public and all the other cr@p associated with trying to retire as millionaire's in their 30s.

If they had stuck to fundamentals (ie making better coffee for better prices than Starbucks and Costa, easy peasy + staff development and retention, which is hard), across maybe 30-50 carefully chosen and organically grown outlets, they could have developed a strong brand and balance sheet that would have taken them through the recession and provided a comfortable life and old age.

But no, they had to join that stupid band of tosspots who want to their business to go 'ballistic'.

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But what is perhaps surprising is that the company gave no hint of problems when it last filed results in December. In fact chairman Peter Breach was positively bullish:

When Stephen Bartlett and I joined the Board two years ago we said that we wanted Coffee Republic to be free of bank borrowings. At that time, bank borrowings amounted to ₤3.3m. We progressively reduced those borrowings to ₤1.5m at the end of this half year (28 September). As of yesterday (Tuesday 2 December) I’m pleased to be able to say the company became free of bank debt.

The repayment results in the elimination of interest and charges approaching ₤200,000 a year and that effect, combined with a steadily improving trading position across the broad portfolio, gives me confidence that the Company is likely to be operationally cash flow positive, and may indeed be earnings positive, by the end of the current financial year - I believe for the first time in the Company’s history.

And the recent share price action also did not suggest anything was wrong.

No warning of going pop. Lots of investors caught with their trousers down.

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