Coffee Republic narrows losses as shake-up nears end

Coffee bar operator Coffee Republic has nearly completed the painful restructuring programme that has seen it close 23 outlets in the past year, it said today.

The revamp, including a shift to deli-style operations, appears to be paying off, with losses for the past six months narrowing and like-for-like sales moving into positive territory.

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Pre-tax losses for the six months to 26 September came in at £880,000, compared with £990,000 at the same point last year. Turnover was also sharply down, as expected because of the reduction in the estate. It fell to £9m, against £11.4m last time around. Chairman Bobby Hashemi said the company was now operating 49 bars, although a number were on the market, compared with 72 a year ago. And the shift to a deli-style operation was going down well with customers, reporting sales increases of more than 20%. Overall like-for-like sales, although flat over the six months, were improving, with third quarter sales up by 2%, said Hashemi. During the period, Coffee Republic's sites at Heathrow Terminal 1 and Richmond were converted to the deli concept, and both had reported "significant" sales increases since. In the past week the Heathrow Terminal 4 had also been converted, bringing the number of delis to six. "We are fine-tuning the deli model and have evolved the concept to ensure that the offering continues to be differentiated and profitable," said Hashemi. A bigger food range had been introduced, including a new range of salads, hot meats and sandwiches, he added. Other new product ranges included hot toasties and a revamped range of muffins and cakes. Wireless and fixed internet access was also being installed in most bars. by Nic Paton Buy this week's *Caterer* magazine for more industry news and analysis