Cafe Coffee Day shuts 280 more outlets in April-June quarter

PTI New Delhi | Updated on July 20, 2020

Company cites profitability issues and anticipated rise in expenses as reasons for the move

Homegrown coffee chain Cafe Coffee Day (CCD) has closed down around 280 outlets in the first quarter of the current fiscal year, citing profitability issues and likely future increase in expenses, a company statement said.

With these closures, the total count of its outlets stood at 1,480 as on June 30, 2020.

Cafe Coffee Day is a brand owned by Coffee Day Global, a step-down company of Coffee Day Enterprises Ltd (CDEL).

The coffee chain also reported a decline in average sales per day to 15,445 during the April-June quarter from 15,739 in the corresponding period of the last fiscal.

However, the count of its vending machines went up to 59,115 units in the first quarter of FY20 from 49,397 in the same quarter a year ago.

Exports halted

“Export operations have been temporarily stopped due to lower margins and higher working capital requirement and around 280 outlets are closed during the quarter based on various factors including profitability and future increase in major expenses,” the company said.

It further said that the decision “will result in continuing the remaining cafes profitable and adding value to the company as a whole to continue as going concern”.

CDEL has been paring its debt through the sale of non-core assets after the death of promoter VG Siddhartha.

In March CDEL had announced repayment of ₹1,644 crore to its 13 lenders after concluding a deal with Blackstone Group to sell its technology business park

CDEL in September last year had announced the sale of its Global Village Tech Park in Bengaluru to global investment firm Blackstone and realty firm Salarpuria Sattva at an enterprising value of ₹2,700 crore.

CDEL has also sold its stake in IT firm Mindtree to L&T Infotech.

Published on July 20, 2020

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