Independent Coffee Republic has opted to go down the franchising route to grow its transformed business.
Sales fell 20% in the year to 27 March 2004 to £17.6m as the company sold off sites and restructured its operations to become a New York style deli-led business.
Coffee Republic, which had more than 100 coffee bars three years ago, is now looking to sell off around 30 sites to franchisees retaining ownership of only 10 to 15 stores.
As a result of the changes, chairman Bobby Hashemi said the results, although lower than last year, were in-line with expectations.
He said: "The restructuring has created the platform for the final phase of Coffee Republic's turnaround, namely franchising as a way of facilitating the roll out of the deli concept."
Coffee Republic reduced its losses to £1.4m (2003: £1.7m) during the year.
By Emily Manson
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