India’s leading domestic coffee chain☕, Cafe Coffee Day (CCD) is going through very tough times😣.
The company had to close down nearly 280 of its outlets in the first quarter🗓️ of the current financial year.
As per the company, profitability issues and likely future rise in expenses😟 were the factors behind this move.
Notably, the company closed ☝️about 500 cafes during April-November 2019 due to the same reasons.
More worries on its mind!
CCD has 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.
The company has also temporarily stopped its exports🚢 due to lower margins and higher working capital requirement.
It expects this move will help it🙂 in running the remaining of its profitable outlets.
Clearing the debt burden
CCD has been badly struggling after the untimely death😔 of its founder, VG Siddhartha last year.
It had a debt obligation of Rs. 5,000 crores at the time.
The company has been selling its non-core assets to pay back that debt.
It repaid Rs. 1,644 crore to 13 of its lenders in March this year after selling its technology business park🏢.
Last year, it sold🤝 its Global Village Tech Park in Bengaluru for Rs. 2,700 crore for the same reason.