From Times Online
July 7, 2009
Catherine Boyle and Dominic Walsh

Coffee Republic, the British coffee shop chain, has gone into administration after weeks of speculation about its future.

Administrators KPMG said there would be “inevitable job losses” at the coffee company, which was founded by brother and sister team Bobby and Sahar Hashemi, near Bond Street, in central London in 1995.

Although the Coffee Republic Plc holding company has not gone bust, its three subsidiaries, Coffee Republic (UK), Coffee Republic Franchising Ltd and Goodbean Ltd have all been placed in administration.

KPMG hopes to sell on some of the company’s profitable franchises and outlets, although Mr Hashemi, who quit the company in 2006, is understood to have ruled out a return to his old company.

A source close to Mr Hashemi, who is now in private equity, said last night: “Never say never, but Bobby has moved on and is focused on other things.”

Richard Hill, restructuring partner at KPMG, said: “The recession is hitting discretionary spending on the high street and some of the less profitable bars with expensive leases have suffered.

“However, Coffee Republic has a strong brand and I expect considerable interest in the profitable parts of the business.”

The group has 153 directly-employed staff, 127 at 20 group-operated outlets. There are 187 Coffee Republic-branded cafes in total in the UK and overseas, including 70 franchises and a further 97 concessions in cinemas, retail outlets and hotels.

The company suspended its shares yesterday “pending clarification” of its financial position as administrators prepared to swoop on its UK business.