Financial statements reveal India’s largest coffee chain has been battered by financial irregularities first unearthed in 2019 and India’s devastating Covid-19 surge in early 2021
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Café Coffee Day's store count has reduced from 1,752 outlets three years ago to 572 sites at the end of March 2021
Café Coffee Day continues to reel from the effects of the pandemic, with financial reporting showing a significant slump in revenues and profits and mass store closures across the country.
Reporting its financial results for the fiscal year ended 31 March 2021, Café Coffee Day parent company, Coffee Day Enterprises Ltd (CDEL), said revenues decreased 67% to RS 8.53bn ($116.9m) compared to the previous year.
Operating profits decreased 108% to an RS.1.37bn ($18.8m) loss, compared to RS 16.5m ($226.1m) in FY 2019-20. CDEL attributed the substantial losses to liquidity issues arising from the death of the company’s founder, V.G. Siddhartha, and the severe impact of Covid-19 lockdowns over the past year.
Café Coffee Day was rocked by the suspected suicide of its founder V.G. Siddhartha in 2019. A subsequent investigation found Siddhartha had routed 27bn rupees ($360m) out of the company through transactions revealed in a note found after his death.
The company was already grappling with significant debt and the threat of legal action from shareholders as the Delta variant of Covid-19 swept through India in early 2021.
Founded in 1996, Café Coffee grew into India’s largest coffee chain and operated more 1,752 outlets across some 243 cities in the country during 2018/19. However, underlining how the coffee chain has been diminished, CDEL revealed its store footprint had shrunk 67% to 572 stores across 165 cities.
Meanwhile, its Express kiosk business shrank from 537 locations three years ago to 333 sites today, with its vending machine business shrinking from 56,799 to 36,326 units during the period.
Striking a more positive note, the company said efforts to reduce debt were having an impact. 'The Management of the Company is putting its best efforts to get back the company on track’, CDEL wrote. ‘The debt levels have reduced significantly from the beginning of the financial year March 2021’, it added.