Harris + Hoole, a coffee chain part-owned by Tesco, has suffered an annual pre-tax loss of £12.8m, adding to the long list of problems facing the supermarket retailer this year.
The coffee chain‘s announcement strikes another blow to Tesco, who own 49% of the brand, following a year of bad news. A major reshuffling in management at Tesco, which involved Dave Lewis being brought in to manage operations in September, followed their highly reported-on accounting scandal, in which a £236m hole in profits was revealed.
With two thirds of its branches installed in Tesco stores, the £12.8m pre-tax annual loss is in a poorer comparison to Harris + Hoole‘s pre-tax loss of £5.6m for the previous year. Having opened its first store in 2012, Harris + Hoole‘s chief executive and co-founder, Nick Tolley, attributed the sales statistics to “early development costs”. He added, “The way the shops are trading, we are seeing those losses come down in a big way.”
Harris + Hoole have undergone expansion efforts by opening 18 new stores in the year ending 23 February 2014, bringing their now-total to 45, but the coffee shop recently decided to close six stores due to poor performance levels.
Former Chief Executive Officer of Tesco, Philip Clarke, purchased a minority stake in Harris + Hoole in 2012, much to the disdain of some customers who valued coffee brands of independent means. Last year, customers in the Crouch End coffee branch were said to have felt ‘duped‘ when they discovered that what they believed to be an ‘indie‘ coffee shop was in fact 49% owned by a supermarket giant. Hit with accusations that the brand were hiding their affiliation with Tesco, Tolley instructed critics to, “go to our webpage – it‘s not hidden,” and said, “putting it any more prominently would not reflect who we are as a business.”
Australian siblings Laura, Nick and Andrew Tolley, founders of Harris + Hoole, are also the team behind London coffee house Taylor St Baristas. Yet to be discouraged by their previous store-opening efforts, in November 2014 they launched the UK‘s first ever crowd-funded ‘Coffee Bond‘, looking to raise £3m in the hopes of doubling the size of the company and opening further shops; four in 2015, and another six in 2016. Similarly, plans for the Harris + Hoole year ahead include; building on customer usage of their mobile app, which allows users to pay for coffee via mobiles when in-store, opening an undisclosed number of branches, and expanding stores in nightspot locations with alcohol licenses. A spokeswoman for the business stated that, “Harris + Hoole takes an opportunistic approach to expansion.”
