Whitbread to buy up coffee shop chain
Whitbread is to extend its summer spending spree with the purchase of CB Costa Bros Coffee Co, the owner and franchisor of 41 Costa Coffee shops.
The move comes in the wake of the purchase earlier this summer of Marriott franchisee Scott's Hotels for £180m and David Lloyd Leisure for £201m. Unlike those deals, the price Whitbread is paying for Costa Coffee is not being divulged, though industry estimates suggest a figure of £15m-£20m.
The company intends to use the deal, which is expected to be completed in October, as a springboard to UK market leadership in the premium coffee shop sector.
It plans to open about30 new outlets annually over the next few years and is aiming for 150 outlets by the year 2000. Managed operations are favoured, but the opportunity to franchise will continue.
Whitbread's Mike Johnson, who becomes managing director of Costa Coffee, told Caterer the company saw the brand as a logical extension to its restaurants and leisure division portfolio.
The outlets are currently located in railway stations, airports and shopping centres, but Whitbread intends to move into commercial and retail sites, including office blocks. It is also likely to be expanded across Whitbread's leisure and retail business, including Marriott hotel foyers.
Costa Coffee shops, which take between £3,000 and £12,000 a week, are currently in the pipeline for retail sites in Leicester, Croydon and Nottingham and in further railway and airport locations.
Sergio Costa, who founded the chain 30 years ago, will retire after the deal is completed, but the general manager, assistant general manager and retail operations manager will all remain with the business, reporting to Mr Johnson.
