Retail News CRM

Tag: Debenhams

  • It’s all over for Debenhams as liquidators appointed

    It’s all over for Debenhams as liquidators appointed

    British department store retailer Debenhams is to be liquidated after failing to find a buyer, administrators FRP Advisory announced on Tuesday.

    FRP will commence a wind-down of the business, which was founded back in 1778, spelling the end of 12,000 jobs, mainly in the UK. It has 124 stores there and in Denmark, where it owns Magasin du Nord.

    However, the liquidator said it would continue to seek offers for all or parts of the business during the process.

    The collapse comes a day after Sir Philip Green’s Arcadia Group was placed in administration.

    Debenhams was first placed in administration on April 9 last year in a pre-pack administration which resulted in 22 stores being closed and rent reductions secured for many more. A second administration came exactly 12 months later this year.

    Efforts to find a suitor have been underway for eight months, with the most recent being JD Sports which quit rescue talks on Tuesday following the demise of Arcadia.

    According to its website, Debenhams operated 45 stores under licensing agreements in 17 countries including Malaysia, the Philippines and Pakistan in Asia. An earlier foray into Vietnam failed.

    The remainder of the franchises are in Eastern Europe and the Middle East, with the first franchise opened in Bahrain in 1997.

    In a statement, FRP said that given the current trading environment and the likely prolonged effects of the Covid-19 pandemic, the outlook for a restructured operation is highly uncertain.

    “The administrators have therefore regretfully concluded that they should commence a wind-down of Debenhams UK, whilst continuing to seek offers for all or parts of the business.”

    Trading will continue at UK stores and online to clear current and contracted stocks.

    “On conclusion of this process, if no alternative offers have been received, the UK operations will close,” said FRP.

  • Debenhams begins liquidation of Hong Kong business

    Debenhams begins liquidation of Hong Kong business

    British multinational department store Debenhams has begun liquidation of its operations in Hong Kong, along with its operations in Ireland and Bangladesh.

    The move comes a week following filing for administration in the UK, according to a report in Retail Gazette.

    All of Debenhams’ Hong Kong staff will have their positions terminated as the liquidation process commences in Asia. In Ireland, liquidators have been appointed.

    The firm has continued operations in Denmark under the Magasin brand, where it currently trades online despite temporary closures of its physical stores. It is intending to reopen as many of its 142 locations in England as possible once business restrictions are lifted.

    The majority of Debenhams’ furloughed staff in Britain are receiving government support during the coronavirus pandemic. The firm’s administrators have said that if a court finds Debenhams responsible for staff wage liabilities, many positions may be made redundant.

  • Debenhams warns shareholders could lose investments

    Debenhams warns shareholders could lose investments

    Struggling department store chain Debenhams said shareholders could lose their entire investment as a result of some of the restructuring options it is considering. The 200-year-old retailer said it is trying to refinance its debt, restructure its estate after a series of profit warnings and seek a cash injection of up to £200 million (A$373.1 million) from existing lenders at it tries to fend off a bid by Sports Direct’s Mike Ashley. Ashley had offered a £150 million loan to Debenhams, but as part of the deal, he would have to be in charge of the chain.

    The department store retailer said certain restructuring options “would result in no equity value for the company’s current shareholders”. Lenders have until this Thursday to approve Debenhams’ cash call, which it says will allow it to restructure. The company had warned its shareholders that some of their restructuring options could see their investment wiped out.

    Last Friday, Debenhams posted an announcement on the London Stock Exchange, confirming that it has received a proposal from Sports Direct International in connection with a proposed acquisition of Magasin du Nord, conditional upon Mike Ashley being appointed as the CEO of Debenhams.

    “This proposal comes without any commitment to participate in the wider financing solution,” Debenhams said.

    The department store chain said the board has responded to Sports Direct directly, that, as with all other proposals received to date from Sports Direct, it does not address the company’s funding and restructuring requirement, while balancing the interests of all stakeholders.

    “Magasin is a key part of the Debenhams group, is cash flow generative and a meaningful contributor to group profits,” Debenhams said. “As such, Magasin is an important part of any lending proposition and therefore any broader solution that protects value for the group.”

    “Further, there are obvious concerns with the proposal that Mike Ashley becomes CEO of Debenhams given that Sports Direct owns our direct competitor House of Fraser.”

    Debenhams said the board has remained open to engagement with Sports Direct throughout its refinancing process and has provided clear guidance on what would represent workable solutions that would allow Sports Direct to participate while also protecting the interests of other stakeholders.

    But, according to Debenhams, this guidance has been repeatedly ignored by Sports Direct.

    Debenhams said it continues to make progress with its refinancing and restructuring discussions with existing lenders, noteholders and other stakeholders.

    “The board remains open to constructive involvement from Sports Direct and other stakeholders in this process.”

    Magasin du Nord has been put up for sale by Debenhams last year and Sports Direct offered to purchase the business . Under the proposal, Debenhams would have a 12-month option to buy it back at the price it was sold.

    Debenhams would also have the right to continue to market the business, gaining the benefit from any uplift above the initial sale consideration were it sold to a third party in that 12 month period.

    In connection with the above, it is proposed that Ashley would become a director and the CEO of Debenhams to assist Debenhams through its restructuring process.

  • Debenhams profit plunges 84 per cent after storm

    Debenhams profit plunges 84 per cent after storm

    Debenhams profit plunged 84 per cent in the half year to March 3.

    The UK department store operator says its like-for-like sales fell 2.2 per cent during “challenging conditions” in its home market. Its pre-tax profit fell from £87.8 million in the same period last year to £13.5 million.

    The company said a major contributor to its falling sales was the forced closure of about 100 stores after a major storm hit the UK in February. Christmas sales were also down.

    “We approach the remainder of the year mindful of the very challenging market conditions, but with confidence that we have a strong team and the right plan to navigate them and return Debenhams to profitable growth,” said CEO Sergio Bucher in a statement.

    “It has not been an easy first half and the extreme weather in the final week of the half had a material impact on our results,” he said.

  • Debenhams kicks off at St Collins Lane

    Debenhams kicks off at St Collins Lane

    British retailer Debenhams has kicked off in the Australian market, today launching its first local department store at St Collins Lane in Melbourne.

    The heritage name said it has taken a deliberate shift away from the traditional department store format in Australia and will offer exclusive brands in a small-format layout – across two storeys and 3600sqm – which represents a new concept specifically developed for the Australian market and draws on over two centuries of experience.

    “Debenhams St Collins Lane is not a traditional department store – it is a new destination for the contemporary customer in Australia,” said Graham Dean, managing director of Debenhams Australia.

    “Our research shows that a Debenhams customer wants to not only enjoy the latest seasonal trends, but find the right item at the right time, and always have our store at their fingertips.

    “They are also frustrated by traditional department stores with limited assistance on the floor, confusing layouts and unnecessary waiting times.

    “We will complement world-class service and in-store services such as a style suite, beauty rooms, mobile POS and a café, with a new Debenhams Australia mobile app that will provide a better experience and ensure we are always there, where-ever and whenever our customers need us.”

    Dean told Inside Retail that the UK brand has curated a bespoke merchandising mix to the Melbourne demographic, both in mix and format.

    “We’re not a traditional department store in the way that you would view a David Jones, Myer, or indeed a Debenhams back in the UK. This is a new format, new proposition to market. A curated offer with majority exclusive products.”

    The smaller format is an aspect that the head office in the UK will be monitoring closely, with key executives set to see first-hand how the store is performing while in town attending the upcoming Melbourne Cup.

    “They definitely see this as the way of the future for department stores and super keen to see how it trades.”

    The offering will include an extensive collection of women’s and men’s apparel, sleepwear and intimates, athleisure, accessories and contemporary homewares, along with established beauty and fragrance brands including the likes of MAC, Tom Ford, Bobbi Brown, Gucci, Chloe and Valentino.

    The Designers at Debenhams collection for women and men will offer exclusive brands not available anywhere else in Australia and feature J by Jasper Conran, Star by Julien Macdonald, Nine by Savannah Miller, Butterfly by Matthew Williamson and Kate Middleton favourite, No. 1 Jenny Packham.

    Debenhams St Collins Lane will join a portfolio of 243 Debenhams stores across 28 countries worldwide, and supports the retailer’s Debenhams Redesigned global strategy launched in early 2017 to drive the business forward.

    The store will anchor the new St Collins Lane retail precinct, in a popular area of the Melbourne CBD considered by many to be the city’s traditional home of fashion and beauty.

    “The opening of Debenhams St Collins Lane is an evolution of our success with the Australian market, with online sales to Australia already the largest outside of the United Kingdom,” Mr Dean said.

    “There are more than 840,000 people in the Melbourne CBD every day and more than 2.2 million international visitors to the city each year, many of whom would have already been a customer in one of our Debenhams stores around the world.

    “We have a track record of getting retail right, and we are confident in this new offering for Australia.”

  • John Lewis fashion sales soar

    John Lewis fashion sales soar

    John Lewis fashion sales rose a tremendous 7.2 per cent over Christmas – eclipsing the UK department store’s rivals, even robust performances by Debenhams, M&S and House of Fraser.

    Own brand collections continued to strengthen throughout 2016, with the inclusion of Modern Rarity filling a gap in its private label brand portfolio by appealing to a stylish, design-led shopper and taking Cos on as a direct rival. John Lewis should consider taking this brand into menswear, given the outperformance of menswear in 2017 versus other clothing sectors, and the current gaps in the market for brands targeting the 30-45 year old male shopper.

    Its Electricals Home & Technology division was up against the strongest comparative, rising 4.8 per cent against a 9.6 per cent rise last Christmas. The department faced huge discounting pressure from rivals Amazon, Argos and Dixons Carphone, particularly over Black Friday when promotions were offered over a week ahead of the main event. However, John Lewis’ strategy of selling the latest models across technology categories will have limited its exposure to the breadth of discounts available elsewhere.

    As one of the leading players in selling affordable smart home technology, John Lewis can expect to see a greater uptake in demand in 2017 following its significant investment in the department during 2016 and increasing consumer awareness.

    Home reported the slowest sales growth at 2.7 per cent against a 5.1 per cent rise last year, though this is outperforming both the home and furniture markets and is resilient given the fall in housing transactions.

    Paula Nickolds takes over the reins this month from Andy Street, marking the start of a new era for the department store. Nickolds’ understanding of the business will ensure Street’s legacy and strategy will be carried forward, but her new appointment begins at the start of what will be a challenging and unpredictable three year (at least) period, so new initiatives will be important to stimulate demand.

    -Honor Strachan

  • US investor buys into Mitra Adiperkasa

    US investor buys into Mitra Adiperkasa

    US private-equity company General Atlantic has made its first investment in Indonesia by buying into lifestyle retailer Mitra Adiperkasa (Map).

    It has subscribed for Rp1.08 trillion (US$80.5 million) in bonds issued by Map which are convertible into shares in its F&B subsidiary Map Boga Adiperkasa (MBA), which runs Cold Stone Creamery, Godiva, Krispy Kreme, Pizza Express and Starbucks in Indonesia. It has more than 300 stores across 24 cities, and has more than doubled its store count over the past five years.

    Map runs multi-channel retail concepts in Indonesia across a diversified portfolio of department stores, sportswear, specialty fashion, F&B, and lifestyle products. It has nearly 2000 retail stores.

    “We believe the rapid rise in Indonesia’s middle and young working classes, the increase in this population’s disposable income, and the continued rural-to-urban migration represents an opportunity for us to strengthen our international food brands and cement our leadership position in the F&B market,” says Map CEO V.P.

    Sharma. A portion of the investment money will be used to accelerate the F&B division’s network expansion.
    “Indonesia’s domestic consumption comprises more than half of gross domestic product, and consumption patterns are increasingly shifting toward modern and aspirational lifestyle brands,” says General Atlantic Southeast Asia head Wai hoong Fock. “These secular trends position MBA’s food & beverage portfolio well for further expansion.”

    Regional commitment

    The partnership, General Atlantic’s first investment in Indonesia, indicates its commitment to long-term market prospects in South-east Asia,” says Fock, who joined General Atlantic from CVC Capital Partners last year to lead its South-east Asia investing program. He is based in the firm’s Singapore office.
    General Atlantic has 18 investment professionals in Asia, based in offices in Beijing, Hong Kong, Mumbai and Singapore. The firm opened its Singapore office in 2011, investing three years later in Singapore-based online mobile entertainment/communication Garena platform. It has also supported the growth of retail and F&B companies including lifestyle brand Tory Burch, luxury fashion brand Zimmermann, restaurant group Barteca Holdings, urban juice-bar concept Joe & The Juice, community accommodation marketplace AirBNB and transportation network company Uber.

    Map has 1921 retail outlets in 68 cities throughout Indonesia. Its retail concepts include department stores (Debenhams, Galeries Lafayette, Seibu and Sogo), fashion and lifestyle (Crabtree & Evelyn, Kipling, Lacoste, Marks & Spencer, Massimo Dutti, Nautica, Sephora, Swarovski, Topman, Topshop and Zara), sports (Converse, Golf House, Oakley, Payless ShoeSource, Reebok, Rockport, Skechers, The Athlete’s Foot and The Sports Warehouse), F&B (Burger King, Cold Stone Creamery, Domino’s Pizza, Godiva, Krispy Kreme and Starbucks), kids (Kidz Station and Oshkosh B’Gosh) and bookstore Kinokuniya.

  • Selfridges shines, Debenhams flounders

    Selfridges shines, Debenhams flounders

    Two iconic British department store brands released their annual trading figures overnight – and the contrast was blinding.

    Debenhams underwhelmed with like-for-like figures showing a decline in sales of 1.1 per cent, ts growth driven purely by the addition of five new stores and online advances.

    Yet Selfridges’ “winning formula” delivered another year of robust sales growth, in the words of Verdict Retail lead analyst Honor Strachan.

    “Its ability to bring on board the right mix of brands, tailor each of its stores to the local audience and create an ever-changing in-store shopping experience has ensured Selfridges remains relevant and an exciting destination among an increasingly demanding shopper base,” said Strachan.

    His colleague Kate Ormrod, a senior analyst, was less complimentary about Debenhams, describing the company’s UK gross transactional value of £2.352 billion as “underwhelming”.

    “Debenhams is slightly in limbo at present while new CEO Sergio Bucher familiarises himself with the company and forms his strategy to revitalise the business. Focus on clothing and homewares is much needed in FY2016/17, as well as ensuring the instore experience is consistent across its UK store portfolio.”

    Ormrod said Debenhams’ online business remains a key asset, and now represents 14.7 per cent of group sales – aided by its focus on mobile, its click & collect service, and investment in IT and systems, which bode well for the Christmas peak.

    “Refocusing the business away from clothing has been successful with solid growth achieved in beauty, gifting and accessories. While trading in the overall clothing market has been volatile, Debenhams must review and refresh its ranges to maintain its appeal and relevance in the market – or face further market share erosion. Selected Designers at Debenhams sub-brands such as Star by Julien Macdonald and J by Jasper Conran feel dated, along with core ranges such as Red Herring and Mantaray. Though Debenhams appears hesitant to rectify its problems in clothing, there is opportunity to target mature shoppers and better compete with the likes of JD Williams,” she said.

    “Debenhams’ strength lies in beauty and the addition of cult brands such as Kat Von D ensure the retailer garners destination appeal both instore and online. Driving cross-sector spending is essential to turn younger beauty shoppers into core Debenhams customers. Plans to introduce lighting to 30 stores, a clear attempt to muscle in on area BHS excelled in, and introduce furniture hubs in eight branches are positive steps, though Debenhams’ overall homewares offer pales in comparison to rival John Lewis in terms of breadth and destination appeal.

    Selfridges deflects the pressure

    Strachan paid tribute to Selfridges’ ability to prosper while facing “immense pressure from sector specialists and online pureplays”. Gross transactional value rising 5 per cent to £1.4 billion.

    A £300 million commitment to refurbishing its Oxford St, London, flagship dented its operating profit, which slipped marginally to £152 million, trimming margins to drop one percentage point to 10.9 per cent.

    “The modernisation of its flagship London store, taking over two years and due to be completed in spring 2018, is central to Selfridges’ strategy in creating destination departments, such as its 2016 openings of the Body Studio and Designer Studio, off the back of its success of its Denim Studio (2013) and Shoe Galleries (2010),” said Strachan.

    “The accessories department is currently being overhauled with the first phase due to open in time for peak Christmas trading, and will undoubtedly benefit from the influx of tourists taking advantage of the weak pound.”

    He said with Selfridges’ proposition heavily skewed to the luxury end of the market, he expects Selfridges to have a very strong second half in 2016/17, resulting in full year growth exceeding its 2015/16 financial year and an increase in its UK department store market share.

    “Selfridges continues to raise the bar by surprising its shoppers – with brand launches including Missguided for example – which is key as we approach a period of more considered spending among domestic consumers.”

  • M&S, Debenhams stand most to gain from BHS breakup

    M&S, Debenhams stand most to gain from BHS breakup

    Only the very bravest of investor should consider retaining BHS in its current dilapidated state. But if such a buyer cannot be found, and a BHS breakup ensues, with the store estate sold to other retailers, Marks & Spencer and Debenhams would be the main beneficiaries.

    As the deadline for bids for BHS looms, hopes are rising that a buyer can be found for the entire store estate and that its 11,000 employees can be protected. Even if such a buyer is found, it is likely to have to conduct major surgery to revive the moribund brand. Verdict data shows that it has consistently lost market share to its competitors in all its key sectors, and its weak multichannel offer, dated brand and underinvested store environment mean any buyer would have to think seriously about retaining the BHS name.

    BHS’ clothing proposition has become ever more irrelevant over the years, and many of its clothing shoppers have already defected to more agile competitors, leading to its market share more than halving in the 10 years to 2015.

    BHS clothing market share 2010-15

    BHS’ predominantly 45+ shopper base enjoy the convenience of shopping for a disparate variety of products under one roof, which means that department store rivals such as Debenhams and M&S would be first in line to benefit from its fallout. The grocers should also receive a much-needed boost given the similarity of their clothing proposition to BHS in terms of design and affordability.

    This is backed up by looking at where BHS clothing shoppers also tend to shop (from Verdict’s March 2016 How Britain Shops survey of 10,000 consumers) – M&S is the clear leader, and should be able to translate this into an increase in market share.

    Where BHS clothing shoppers also shop for clothing

    Clothing specialists at the value end of the market, such as Matalan, Primark and New Look are also likely to benefit; as are online pureplays such as Amazon – albeit to a lesser extent.  It is, however, those retailers that make a concerted effort to draw in BHS shoppers, through customer acquisition initiatives such as targeted promotions or local marketing campaigns that will see the maximum gains.

    BHS homewares market share 2010-15

    BHS’ unopposed trudge toward mediocrity has had a significant impact on where its remaining shoppers are likely to now go for homewares purchases. The retailer’s brand positioning means its shoppers will have also shopped at the ever growing homewares discounter set, like B&M and Home Bargains. However, it is Amazon and Argos, both value focused retailers with modern and extensive delivery/channel offers that have been the main beneficiaries of disaffected BHS shoppers in the past and will undoubtedly be so in the future.

    High street retailers M&S and Debenhams are also in line to see a marginal upswing as high street focused customers seek out alternatives. The former has the most similar customer profile to BHS and hence is more likely to be a first choice. However, M&S has made some strategic moves to appeal to younger, more fashion-conscious homewares shoppers in recent years, therefore BHS’ customers may be a little surprised about what is on offer when they visit, aside from its core bedding and bathroom offer.

    Living room textiles: Home Retail Series market share 2015

    BHS is currently strongest in softer, more aesthetic categories, such as living room textiles and lighting, as opposed to functional products such as cookware. Therefore its demise would be unlikely to have a significant impact on the grocers. Conversely, Dunelm and Next share a similar emphasis on textiles and design-led categories, and as such, their already strong performance in the homewares category is likely to be bolstered further should BHS disappear altogether.

     

  • British brands invading Philippines

    British brands invading Philippines

    Asif Ahmad, the UK ambassador to the Philippines, is one of the busiest diplomats in the country, as he leads, almost on a weekly basis, the opening of new outlets put up by dozens of British companies which are taking advantage of the rapidly growing consumer market and improved purchasing power of Filipinos.

    Ahmad, the 59-year-old diplomat who has been assigned in the Philippines since July 2013, says while several British companies have established their presence in the country for several decades now, more are expected to land in the Philippines soon.

    “We have done it in fashion.  We have done it in cars. We have done it in films and music.  The next story is eating and drinking,” says Ahmad, during the opening of the second outlet of Costa Coffee in the Philippines at Robinsons Place in Ermita, Manila.

    Costa Coffee, the leading coffee chain in the United Kingdom, is the latest British brand setting its sights on the Philippine market, which Ahmad says offers a lot of opportunities for foreign companies.

    The ambassador says the expansion of British firms in the country is a part of a deliberate effort of the London government to triple its exports to the world to 1 trillion pounds by 2020.

    Unilever, an Anglo-Dutch company, is one of the biggest distributors of consumer products in the Philippines while Royal Dutch Shell Plc. is one of the three largest petroleum players in the country.

    The last couple of years saw dozens of UK firms opening outlets or expanding their presence in the Philippines.  In November 2013, London opened its airspace to Philippine Airlines via Heathrow Airport, with the help of Ahmad.  This has triggered a faster movement of people, including investors and tourists, between the two countries.

    British financial giants HSBC, Standard & Chartered, Barclays and Pru Life UK have strong presence in the Philippines while UK companies that are expanding in the country include Pearson Plc., Ashmore Group, British American Tobacco, British Petroleum, ECR Minerals Plc., CRH Plc., Arup, Nectar Group Ltd., MacKay Green Energy Inc., Forum Energy, Pitkin Petroleum Plc., Eaton Corp. Plc. and Weir Engineering Services Ltd.

    Top British brands opening or adding outlets in the Philippines include Rolls Royce, Range Rover, Jaguar, Mini Cooper, Morgan Motors, Tesco, The Body Shop, Fitness First, Toni & Guy, Remington UK, Marks & Spencer, Debenhams, Lee Cooper, F&F, John Lewis, Burton, Reiss, Speedo, Hamleys, Burberry, Topshop, Topman, Dorothy Perkins, Mitre Sports, Berghaus, Kangaroos, Superdry, Warehouse, Clarks Shoes, Paul Smith, Mothercare, Hackett London, Lush, TM Lewin, River Island, Cath Kidston, Pepe Jeans London, Savile Row, Lyle & Scott,  Whyte & Mackay, Twinings, Diageo, Union Jack Tavern, Wolf & Fox, Chuck’s Grub, Waitrose and Yummy Organics.

    Ahmad says more brands will expand in the Philippines soon. “We have a strong presence of British brands that is gonna grow.  My government, the UK, has said that we must triple exports to 1 trillion [pounds]. My mission here is to grow three times more than before.  That is a very strong target to have,” he says.

    The UK is already the largest investor among European countries in the Philippines.  “The easy target that we have met is being the number one investor in the Philippines from the European Union. We have achieved that already,” he says.

    “In terms of trade, we have a long way to go.  If we added it both ways, it [bilateral trade] adds up to $2 billion.  We have to make it $6 billion,” says Ahmad.

    He says the UK embassy is working with the British Chamber of Commerce to help more companies navigate the Philippine market.  British investors are looking at infrastructure, public-private partnership projects, water, healthcare, education, information technology and defense sectors, he says.

    The British Chamber of Commerce is arranging more trade missions to bring more British brands in the Philippines this year to look at opportunities, given the country’s improving economy.

    “What we are seeing is that the government has more money.  The infrastructure projects are now speeding up, after a difficult start.  We are seeing people consuming more, spending money more, not just in houses and cars, but also in their lifestyle,” Ahmad says.

    Ahmad says Filipinos can afford to buy British brands.  “It [local market] has been ready for quite some time.  That’s why we have been very successful here.  If you go back, they [British companies] have been here for a long time and they are expanding still.  New ones are coming onboard.  What Costa Coffee does is something different.  It is in food and beverage segment, which has much more to offer,” he says.

    Costa Coffee opened its first outlet at Eastwood Citywalk 1 in Libis, Quezon City in June and plans to open three more branches this year at Tera Towers in Fort Bonifacio, E. Rodriguez Jr. Ave. in Quezon City and Robinsons Antipolo in Rizal.

    “We plan to open 70 Costa Coffee branches in the Philippines over the next five years,” says Costa Coffee Philippines general manager Corinne Milagan, who heads a new unit of Robinsons Retail Holdings Inc. to guide the expansion of the Costa brand in the country.

    Among those who attended the opening of the Costa Coffee branch at Robinsons Place Manila are Ahmad, Milagan, Robinsons Retail Holdings president and chief operating officer Robina Gokongwei-Pe, Costa Coffee International managing director Chris Rogers, Robinsons Land Corp. president and chief operating officer Frederick Go and Costa Coffee franchise manager for Southeast Asia and India Matt Kenley.

    RRHI formed a new company called Robinsons Gourmet Food and Beverage Inc. to operate the Costa Coffee chain in the country. Robinsons Gourmet teamed up with Whitbread Plc. of the United Kingdom to bring the British coffee brand to the Philippines.

    “The Philippines has fantastic opportunity for the Costa brand.  It brings something different to the market. A different coffee, a different environment and a great people.  And it brings a little taste of London to the Philippines,” says Rogers.

    “We have been looking forward to the next 20 to 30 years. The Philippines is an exciting place to be, because of the potential growth.  The economy is growing strongly. The consumer population is growing. There are good dynamics,” says Rogers, who joined Whitbread eight years ago.

    Rogers has been leading the international expansion of the Costa Coffee brand since July 2012.

    Robinsons Retail plans to open 70 Costa Coffee stores in the Philippines over the next five years, with an average cost of P10 million per outlet.

    Rogers says Costa Coffee has found its niche in the competitive coffee market.  “Our difference is our coffee.  We have the Mocha Italian blend.  We are very particular with the beans we choose–high-quality beans with a particular taste. The environment is also very different,” he says.

    Milagan says the Philippine coffee market is now prepared for a British brand.  She says coffee lovers, including British expatriates, were lining up hours prior to the opening of the Costa Coffee branch at Robinsons Place Manila on July 31.

    “The [coffee] market is not yet saturated. The Philippine market has matured in terms of  food and drinking preference. We are graduating now from instant coffee and we are now shifting to coffee made in a hand crafted way,” says Milagan.

    Milagan says “the Filipino taste has become discriminating, as they travel abroad.”

    Costa Coffee was founded by Italian immigrants Sergio and Bruno Costa in 1971 in Lambeth, London. The Costa brothers were known for creating their unique blend of coffee, a combination of Arabica and Robusta beans. They called it Mocha Italia, a blend that is a closely guarded secret to this day.

    The brand was acquired by Whitbread Plc. in 1995.  The UK firm continues to serve the original Mocha Italia recipe, which is slowly roasted in the Old Paradise Street Roastery in London.

    Milagan says Costa coffees are all handcrafted and espresso-based.

    Costa Coffee now has 3,000 stores in more than 30 countries. Costa employs Master Genarro Peliccia as the official coffee master who ensures that the taste remains consistent to the original blend.

    Gokongwei-Pe says Costa Coffee is the second British brand brought to the Philippines by Robinsons Retail, the first being the fashion brand Topshop.  She says her company will bring more foreign brands, depending on the performance of Costa Coffee.

    “We have to make sure this works first,” she says, adding that the outlook for the Costa brand in the Philippines is promising.

    “I believe in good luck.  I believe in good vibrations,” she says.