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The Korea Herald
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THE INVESTOR
March 29, 2024

Retail & Consumer

Caffe Bene faces W15b debt after excessive expansion

  • PUBLISHED :April 05, 2017 - 16:00
  • UPDATED :April 05, 2017 - 16:00
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[THE INVESTOR] Caffe Bene, a South Korean specialty coffee chain that once boasted the largest number of stores among rivals, is facing mounting debt after its relentless expansion at home and abroad.

According to the Financial Supervisory Service on April 5, its total debt soared to 14.8 billion won (US$13.87 million) last year.




Its sales fell 32 percent to 81.7 billion won on-year, while its operating loss increased to 13.4 billion won, an 18 percent jump from a year ago.

The company’s aggressive expansion strategy that has continued since its establishment in 2008 is cited as the key factor behind the mounting debt.

The number of stores exceeded 800 in 2012, with sales reaching a peak at 220 billion won. But the rapid growth was soon challenged by the saturated market.

As of 2015, Caffe Bene recorded the highest rate of closing stores among top 10 coffee chains here, shutting down 140 stores or 14.6 percent of the total operations, according to the Fair Trade Commission.

The company entered US and Chinese markets in 2012 through joint ventures with local partners. But the number of Chinese shops fell to 850 in April 2016 from 912 in 2014.

By Park Yuna (yunapark@heraldcorp.com)

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