Cafe Coffee Day enters into a strategic alliance with London Bubble Co to ease debt

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Premium waffle brand London Bubble Co has entered a strategic alliance with Indian retail cafe chain Cafe Coffee Day. London Bubble Co (LBC), the waffle-making startup will open 150 shop-in-shops in Cafe Coffee Day (CCD) in a bid to generate incremental revenue amid increasing pressure to repay debts.

LBC’s shop-in-shop business model with CCD will enable it to scale up its footprint in the country and is touted to be the largest partnership of its kind in India.

CCD is a brand owned by Coffee Day Global, a step-down company of Coffee Day Enterprises Ltd (CDEL).

Real Estate and facility management company Realta Ventures has announced the acquisition of, London Bubble Co. The move is expected to revive the three-year old pioneer waffle brand and drive growth by 202 per cent by February of 2021, the company said in a statement.

LBC will also have an all-new menu fostering and will serve only oil-free waffles. According to the agreement between the two, the coffee retailer will not be allowed to have a competing portfolio that LBC sells including waffles, chocolates, pre-packed ice-creams and dairy-free milkshakes.

Cities to be covered in the strategic alliance with CCD are Agra, Ahmedabad, Amritsar, Aurangabad, Bangalore, Bhubaneswar, Chandigarh, Chennai, Delhi, Dobespet, Goa, Guwahati, Hyderabad, Jaipur, Kolkata, Lucknow, Mohali, Mumbai, Narsapur, Nasik, Pune, Sanjgaon, Shimla and Thiruvananthapuram.

In May 2020, CCD entered into a similar contract with Kolkata-headquartered Wow! Momo Foods for selling momos at their cafes to keep business afloat amid the nationwide lockdown.

In the first quarter of the last fiscal year FY19-20, CCD closed down around 280 outlets in the citing profitability issues and likely future increase in expenses, a company statement had stated in June 2020. With these closures, the total count of its outlets stood at 1,480 as on June 30, 2020.

The coffee chain also reported a decline in average sales per day (ASPD) to 15,445 during the April-June quarter from 15,739 in the corresponding period of the last fiscal.

CDEL has been paring its debt through the sale of non-core assets after the death of its promoter V G Siddhartha. Earlier, in March 2020 CDEL had announced to repay Rs 1,644 crore to its 13 lenders after concluding a deal with Blackstone Group to sell its technology business park

In September 2019, CDEL had announced the sale of its Global Village Tech Park in Bengaluru to global investment firm Blackstone and realty firm Salarpuria Sattva at an enterprising value of Rs 2,700 crore. It has also sold CDEL’s stake in IT firm Mindtree to L&T Infotech.



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