Millionaire businessman Ian Semp, the original founder of Caffè Nero, has said he would consider making an offer for the beleaguered chain if it fell into administration.
Caffè Nero became the latest high street brand to launch a company voluntary arrangement (CVA) last week due to the impact of the coronavirus pandemic on its business.
Semp said: "I would be interested at the right price. I have very good contacts in the Far East, which means finance certainly would not be a problem. You would be buying the UK operation purely and you would probably only want about 500 of the current branches. You would not really want the city centre branches because they could be a liability, but it's still a good name, a good brand… It's all possible but I don't think it will go to that."
Semp opened his first coffee outlet in South Kensington in 1990 and added four more premises in London before selling the franchise in 1997 to American venture capitalist and current chief executive Gerry Ford. The business is believed to have been sold for around £5m.
Ford said last week the company had "little option" but to restructure following the closure of its dine-in areas for a second time this year to "better manage" its fixed costs by negotiating with landlords and creditors.
However, Semp questioned if the CVA was simply "a negotiating tactic".
He said: "VAT has been reduced to 5%, the government is funding 80% of salaries, they are probably not paying all the business rates, so all they have is the rents, probably less staff, and they are still open for takeaway. The price of a cappuccino is about £2.70 so the margins are still good. The price of the milk and the coffee today is around about 17p-18p, so there's still an awful lot of profit being made there, I would say.
"I'm sure takings are down in the West End, but in the suburbs business will be OK and in a few months they will be back to 85% normal. I'm just surprised Gerry, who owns about an 80% equity in the company, doesn't sell 25%, a nominal amount, and raise £100m-plus and put that into the business. He wouldn't need to go cap in hand and do a CVA."
Following the sale in the 1990s, Ford and Semp initially operated the business as a 60%-40% joint venture equity split, however Semp resigned shortly after.
Semp added: "I wish I hadn't sold because of the person I sold it to. I had other people that wanted to buy it, including the Café Rouge group, I had talks with PizzaExpress group, but I went wrongly with Gerry Ford because of the joint venture going forward. It was 60-40 to him, but I knew it was never going to work out, we had different opinions on a range of things."