Three main subsidiaries of coffee chain Coffee Republic, Coffee Republic Franchising and Goodbean have been placed into administration after suffering from decreasing consumer spending.
Richard Hill and David Crawshaw of KPMG have been hired as joint administrators. Mr Hill has received a substantial amount of interest, partly from well-known companies. The administrators aim to sell the businesses as going concerns as quickly as possible. Underperforming stores will be shut down and redundancies will be made.
It was only in December that the company announced it had cleared its bank debts of £3.3 million, and was expecting to become cash flow positive by April 2009.
Trading in the UK had apparently become stable, though it would be more cautious with its expansion plans.
The cafe chain had 184 stores in Britain at the end of last year, 114 of which were concessions, 51 were franchises and the company ran 19.
Coffee Republic was established by brother and sister team Bobby and Sahar Hashemi in 1995. The company failed in its attempt to keep up with now larger competitors such as Starbucks and Costas. Its overly ambitious expansion meant that it has struggled to reach profitability.
The holding company Coffee Republic plc has not been taken into administration.
