McDonald's to sell Aroma
06 June 2001
US burger giant McDonald's is understood to be seeking buyers for its 36-strong chain of Aroma cafés. McDonald's bought Aroma two years ago for an estimated £10m and had been working on expanding the chain. But according to City sources it is now circulating lists of sites to rival coffee shop and restaurant operators. One analyst said: "They are trying to unload it. It was a bit of research and development that is no longer wanted." The trigger to McDonald's decision is thought to have been January's successful swoop on 33% of sandwich chain Prêt à Manger, which meant Aroma had "become a sideshow", the analyst added. Another analyst said: "The problem is they paid too much for it and it has not performed." A number of candidates have already been approached, but it is thought unlikely that anyone would want to buy the chain outright. The more probable route is that rivals will cherry-pick the best sites. "They might have to break up the portfolio, some of them may be too close to other outlets," said one analyst. Names being touted in the City as possible buyers include Madison's, Coffee Republic, Costa Coffee, Caffe Nero or even Prêt à Manger itself. It has also been speculated that Swiss hotel and restaurant group Mövenpick might be interested, while Starbucks, which has been aggressively expanding in the UK, is thought to be another contender. Starbucks declined to comment on the speculation today. McDonald's has been under pressure this year, despite the move on Prêt à Manger. It warned in March that profits for the first three months of this year would be lower than expected because of continuing concerns over the safety of beef, prompted first by BSE and now by foot-and-mouth. This, combined with the slowing US economy and the focus on Prêt à Manger, made it more likely that the chain would be looking to wash its hands of Aroma, suggested analysts. No-one at McDonald's was available to comment, but earlier reports said the group had admitted it was "re-examining the focus of the brand". by Nic Paton
