Coffee Republic put into administration

Coffee and deli chain Coffee Republic succumbed to the high street squeeze today as the group called in administrators.

The group has 153 directly-employed staff, of whom 26 are based at its head office in London and 127 at 20 group-operated outlets.

Administrators at KPMG are assessing the viability of individual outlets but warned that job cuts were "inevitable" at loss-making outlets.

The group has 187 outlets in total in the UK and overseas, including 70 franchises and a further 97 concessions in cinemas, retail outlets and hotels. These are not affected by the administration.

Partner Richard Hill said: "The recession is hitting discretionary spending on the high street and some of the less profitable bars with expensive leases have suffered.

"However, Coffee Republic has a strong brand and I expect considerable interest in the profitable parts of the business."

KPMG has been appointed to Coffee Republic (UK), Coffee Republic Franchising and Goodbean, although holding company Coffee Republic plc is not in administration.

Coffee Republic was formed by Bobby and Sahar Hashemi, a brother and sister team.

Their first coffee bar opened in 1995 in London's South Molton street, near Bond Street.

Mr Hill added: "We will be doing whatever we can to find a buyer for the residual business as a going concern as quickly as possible, so interested parties will have to be prepared to move fast."

The collapse into administration represents a turnaround from the more bullish comments from chairman Peter Breach last December.

Despite losses of £527,000 for the six months to September 28, Coffee Republic cleared its debts after paying off its £3.3 million bank borrowings.

Mr Breach said the move would save it £200,000 a year and "combined with a steadily improving trading position" would allow the group to generate positive cash and earnings for the first time in the company's history.

But last Friday the group warned of impending administration and requested its shares be suspended "pending clarification of the financial position of certain subsidiaries".