The founder of Caffe Nero today declared that the chain is “coming back” after a turbulent 18 months in which doubts have been cast over its future.
The coffee chain undertook a CVA last year in order to allow it to better manage its fixed costs and recover from a severe downturn in sales caused by the lockdowns.
It has also been embroiled in a High Court legal challenge from a landlord relating to the CVA and faced speculation that the Issa Brothers – which are reported to own £180m of its lower ranking debts – were interested in the business.
But according to Gerry Ford, who started the business in 1997 and still serves as group CEO, the company’s revenues are recovering strongly and it is even planning to open “dozens” of new stores.
Mr Ford said overall sales were now back up to 87% of pre-Covid levels and should reach 90% in November.
The business, which operates 650 shops in the UK, has now posted 11 consecutive months of positive cashflow and repaid all the debt it accrued during the pandemic.
He declared: “We are coming back. Not there yet, but Caffè Nero is on the road to recovery. Each month trading is getting stronger and our prospects and opportunities going forward are becoming more encouraging.
“We had a strong first quarter (June-August) and many parts of our store estate are back to 2019 sales levels or are even experiencing positive like-for-like sales.
“We expect to see that trend continue and sales to strengthen further over the coming weeks and months. This solid trading is very encouraging and is providing a good platform for us to restart the engines and open a series of new stores over the next 12 months.”
Stores in market towns and suburbs are already back to 2019 sales levels, while branches in high street shopping and destination shopping areas have almost recovered to what they were before the crisis.
Central London stores and transport hub stores are taking longer to recover, although the company said it recorded improvements in September.
Sales through delivery partner Uber Eats rose 200% on a like-for-like basis in the summer and autumn.
Caffe Nero said it achieved £15m of EBITDA in its fiscal first quarter.