BB's retail estate shrinks following administration

06 November, 2009
Page 4 

The number of BB's Coffee & Muffins stores in the UK is expected to nearly halve after going into administration last month, prompted by two years of trading losses.

The café chain, which previously consisted of 37 company-owned and 111 franchised stores in the UK, is in the process of being scaled back to around 80 stores. Thirty of these will be directly owned by Kapelad, a new company set up by BB's previous directors to buy the business out of administration, which is headed up by chief executive Paddy McCarthy.

Negotiations are now under way with franchisees, with up to 50 expected to remain under the BB's brand. Around 40 franchisees have left the group to trade independently and 25 stores in the UK have been closed.

BB's UK arm made a loss of £1.5m in 2008 and was projected to make a loss of just under £1m in 2009, said a spokesman. The directors had made unsuccessful attempts to negotiate lower rents with landlords before going into administration.

"The economic environment meant business had decreased and something had to be done to protect the company going forward," said the spokesman.
BB's Coffee & Muffins' Irish business, comprising 30 stores, did not go into administration and continues to trade profitably, he added.

One of BB's franchisees, now in negotiations with Kapelad, told British Baker that his future remained "very uncertain". "The old contract with BB's is null and void, so I am waiting for a new agreement. I'm still not sure whether I will sign it," he said.

In April, BB's announced that it was planning to open up to 25 outlets in petrol station forecourts in the UK by the end of next year, after launching its first one at a branch of Shell in Middlesbrough in May.





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