April 16, 2024

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[THE INVESTOR] CJ Foodville announced on Nov. 22 that it plans to spin off its coffee chain A Twosome Place to strengthen its competitiveness as a global brand.

The firm’s board has approved the plan to spin off the coffee chain by Feb. 1 next year, the company said.

Under the current structure, CJ Foodville found it difficult for the coffee chain to become profitable enough to finance its other divisions. The coffee chain’s profits had so far been used to compensate for parent firm’s money-losing businesses. 

A Twosome Place’s operating profit stood at 30 billion won (US$32.65 million) in 2016, while CJ Foodville’s overall operating loss reached 2.3 billion won. Over the past five years, except for 2014, the CJ affiliate has been posting an annual operating loss of between 2 billion won to 4 billion won.

“Our coffee chain currently only operates in China and Korea. After the spin-off, Twosome is likely to consider entering other countries,” a CJ Foodville spokesperson told The Investor.

“It is likely that Twosome will enter countries where our bakery chain Tous Les Jours currently operates.”

CJ Foodville’s bakery chain outlets have opened in the US, Vietnam, Malaysia and China.

Regarding the company’s plans to go public after the spin-off, the company said it is definitely considering it but does not have any specific plans yet.

A Twosome Place currently has 910 stores here and around 40 stores in China. It is the second biggest coffee chain in Korea, following Starbucks Coffee Korea.

By Song Seung-hyun (ssh@heraldcorp.com)