Euphorium Bakery is investing £1m in a new factory and shop, and has plans to open a further 20 new shops. The north London-based chain, which currently has seven outlets, is due to open the 7,500sq ft factory, 10 times the size of its previous production facility, in Islington this summer.

Operations director Andrew Green said the company had outgrown its production bakery in its Highbury shop, and had delayed by two years the opening of a new shop in Threadneedle Street in the City of London, due to lack of production capacity. The new factory means the shop, the company’s eighth, will now open in the summer.

Green said Euphorium Bakery had secured private funding that would enable it to expand rapidly to 30 shops over the next four years. This would increase turnover from £3.5m to between £15m and £20m, he added.

Funding has come from several entrepreneurs who specialise in food retail. "We had several unsolicited approaches, which we decided to engage with," said Green. "That process has been going on for the last six months."

The company is recruiting for directors, senior management and shop managers ahead of the expansion. "We are now interviewing to strengthen our board and management team and look forward to opening our new factory with some new team members ready to roll out our plans," said Green. Twenty to 30 other staff will also be taken on.

The company plans to expand its shops initially through acquisition. "We are at advanced stages of negotiation with two separate potential businesses," said Green. "These two have eight shops between them, so we would have 16 in total. Ideally we’d like to have all 16 trading as Euphorium Bakery by late summer."