Coffeeheaven brews plans to expand over Eastern Europe

Coffeeheaven, a chain of coffee and sandwich shops operating in Poland, is looking to expand in to the Czech Republic and Hungary after seeing a 31 per cent jump in sales in its core market.

But the Warsaw-based company, which has 14 outlets nationwide, said sales had slowed in the first four months of the year as hot weather kept customers away from the shopping centres where many of its shops are sited.

Sales in the year to 31 March were up 31 per cent on a like-for-like basis, while sales in the four months to 31 July were up 23 per cent on a like-for-like basis.

The company blamed the "exceptionally warm Spring weather" for the dip in current year sales, but noted that sales in outlets with al-fresco areas were up 32 per cent.

Nevertheless, the growth has given Coffeeheaven, which opened its first shop in Poland in 1999, confidence that it can expand to 50 shops there by the end of 2006 and has spurred it on to open up in the Czech Republic and in Hungary.

"By the time we got to the middle of 2001, we realised we were on to a winner here," Richard Worthington, the company's executive chairman, said. "The Poles drink as much coffee as we do in the UK per capita. You've got more new shopping malls being built in Poland than anywhere else in the whole of Europe," he said.

Mr Worthington, who lives in Warsaw but does not speak Polish, said the company was now looking at "several markets" and would enter the Czech Republic "a store at a time". But it was also keen to get in to Hungary, he said.

He believes the region is ripe for expansion, not least because there are no other coffee-bar chains there. "We're not just another coffee bar business ... this is a completely different world," Mr Worthington said. "There's no competition. We're the only show in town," he added.

In the year to 31 March, the company posted a pre-tax loss of £183,756 on sales of £1.5m. That compares with a loss of £66,410 on sales of £313,109 in the four months to 31 July. Before that, the company had been part of Bakery Services.

Mr Worthington says the company can finance its expansion plans in Poland from existing resources. "Fifty stores in a market of 40 million people is very, very modest. We should be able to do better," he said.