July 21, 2020
CCD is forced to bring down the shutters of nearly 280 outlets in the first quarter of the current fiscal year due to non- profitability issues and expected increase expenses in coming days.
As a reminder, if people are just waiting for the corona to vanish from face of the earth and the world to heal quickly so that you can at ease, sip your favourite coffee at Cafe Coffee Day (CCD) outlet, probably you may be disappointed to know that the CCD has closed almost 280 outlets in the first quarter of the present financial year. CCD gave reasons of non-profitability and expected increased expenses in future. Citing last year, the company has shut about 500 cafes due to the same reasons during April-November 2019. After the closures till date, the total count of CCD’s outlets was 1,480 as on 30th June 2020.
The CCD coffee chain reported a decline in average sales per day (ASPD) to 15,445 during the first quarter this fiscal from 15,739 in the corresponding period of the last year fiscal. Due to lower margins and higher working capital requirements and expenses, the company has temporarily decided to stop its export operations. CCD said that the decision is will help to improve in continuing the remaining cafes.
While a number of increased outlets have been closed, the number of its vending machines on sales increased to 59,115 units in Q1 FY20 from 49,397 in the same period last year. The total debt of the Coffee Day Group stood at Rs 4,970 crore at the time untimely demise of founder VG Siddhartha.
At present, Cafe Coffee Day a brand owned by Coffee Day Global, a step-down company of Coffee Day Enterprises Ltd (CDEL), has been paring its debt through the sale of non-core assets. In March 2020, CDEL had also announced to repay Rs. 1,644 crore to its 13 lenders after concluding a deal with Blackstone Group to sell its technology business park.