Bad year for Coffee Republic
Coffee Republic has called a halt to its expansion programme following losses of £7.5m to the year ending 31 March.
The figure compares with losses of £2.7m the previous year.
Coffee Republic now plans to sell 18 underperforming bars and says it has started several schemes at bar level to increase sales and reduce costs.
Executive chairman Bobby Hashemi said these included "a number of initiatives to increase the footfall and increase average transactions" through "new products, new promotions, and new merchandising".
The company has also launched a strategic review of the business. Said Hashemi: "We believe we have got a strong brand, fantastic sites across the country and for us it's a question of how to leverage that in today's more competitive marketplace."
He did not rule out the possibility of a merger with another operator. "We haven't gone into that level of detail at this stage," he claimed.
Hashemi added: "We've looked at a variety of options but the objective is to speed the path to profitability."
He said the financial results were "disappointing in what was a difficult year for our sector". Coffee Republic had been hit by the rapid expansion in the number of coffee shops in the UK.
"The first steps have been taken to improve operating performance and cash returns and the board believes the company's underlying strengths provide clear and tangible opportunities for restoring shareholder value," he said.
The company saw turnover grow by 32% to £27.8m, compared with £21m the previous year.
In February the firm issued a profits warning following failed efforts to break even and a 5.8% decline in comparable sales for the first half of 2001.
Chief executive Peter Morris blamed a dearth of product launches by the company, an unappealing food range and a fall in tourist numbers.