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Equity deal signal new era for coffee shop chain

September 22nd, 2017 | by LCN Editor
Equity deal signal new era for coffee shop chain
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Indigenous coffee shop chain, Bob & Berts has enjoyed strong growth in recent years, but a new deal with equity investors, BGF, heralds the exciting next stage in the group’s expansion plans outside NI…

Bob & Berts, the home-grown coffee chain set-up in Portstewart in 2013, has announced plans for up to 30 new outlets across Ireland and Scotland within the next four years following a major equity investment from the Business Growth Fund (BGF).

The family-owned chain, which already has 16 outlets across Northern Ireland, has made a name for itself in recent years by combining artisan coffee with an enhanced, all-day food offering and distinctive interior design.

The funding deal with BGF, which is known mostly for its work with SMEs, was concluded around three months ago and speaking to LCN recently, Bob & Berts co-founder, Colin McClean revealed more details of the planned expansion:

“We are going to be opening around 30 new stores in Scotland over the next three to four years, but we will also be looking for four or five more sites in Northern Ireland as well,” he said. “These will be in places where we are currently not represented such as Belfast city centre, Derry, mid-Ulster and Fermanagh.”

“We’ve been to Scotland, we’ve seen what’s available, we’ve seen the size of the towns where our offering would go and we’re pretty confident about everything,” added Colin.

In partnership with his father, Arnold, Colin opened the first Bob & Berts outlet in his home town of Portstewart four years ago. A former geography teacher, Colin had spent some years developing the successful NI clothing brand, Eden Park, before selling that business on in 2007.

Arnold has a background in the hospitality business having run a couple of north coast coffee shops under the Bon Appetit brand since 1996 and when the opportunity to acquire a small bakery came up in the north coast resort town, the pair jumped at it, opening the first Bob & Berts in June 2013.

The third member of the team is David Ferguson (33), from Ballymena. He is Colin’s brother-in-law and he worked in the financial sector in London before becoming involved with the burgeoning Bob & Berts brand in 2014.

“I was working in England before that and I saw the growth in casual dining and in food and beverage,” he told LCN. “I came home at Christmas and talked to Colin about getting something started. Initially, we thought it might be something a little more alcohol-focused but after about six months, we realised that we already had a business with great potential in Bob & Berts.”

David become involved in the project just as agreement was reached to establish outlets in Menary’s department stores across Northern Ireland. There are currently branches of Bob & Berts in four of NI’s five stores.

Colin says that with growth occurring quickly within the business, they are keen to get the latest phase of their expansion plans underway:

“We have successfully opened 10 new stores in the last two years and working with BGF will allow us to accelerate our growth plans,” he added. “Fundamental to our growth plans will be maintaining the culture and the ethos which has made Bob & Berts a hit with our customers.”

David revealed that one of the biggest challenges involved in expanding the business into Scotland is extending the supply chain:

“We value that chain very much and the products that we use and we want to be able to replicate what we have here, over there,” he said. “Obviously, we’re expecting a number of other challenges going forward, such as managing staffing on the ground, and these are things we will have to work through.

“As a business, we have grown about 160 per cent over the last year and if you look at it from site to site, then it’s about 10 per cent, which is certainly above average for the industry,” added David.

“One of the big priorities for us is going to be building a team around us and we’re focused at present on appointing a few more area managers to take some of the burden away from us. While they are managing the company, we will be off trying to grow it and develop new sies.”

Bob & Berts is looking as far south as Dumfries for its expansion into Scotland:

“From there, the north of England would be a very easy jump for us,” adds David.

Colin says that in five years’ time, he would ideally like to see the brand operating from around 50 sites:

“I would like to be in Northern Ireland, Scotland and hopefully, the north of England,” he adds. “I’d like to see strong sales and growth in our home business and growth at each site. Equally, we would want to develop our people, many of whom have been with us from the beginning and provide good quality jobs for them.”

As part of the BCF deal, a non-executive director has been appointed to help the Bob & Berts team develop the business. Mohan Mansigani if a former chief financial officer with Costa Coffee and the influential Casual Dining Group:

“He’s a sounding board for our ideas,” explains Colin. “He meets us every month, lets us leverage into his network to find people who can answer our questions and he tells us what t watch out for.”

Gemma Hamilton, an investor from BGF’s Northern Irish team, has also joined the board at Bob & Berts.

Patrick Grahan, head of BGF’s team in Northern Ireland and central Scotland, says that the group is very excited to be working with the coffee shop brand:

“This investment, along with the introduction of Mohan, who brings a wealth of experience to the company, will help unlock their desire and drive to expand significantly in the coming years and we look forward to partnering with the business for this journey,” he added.

 

Caption for pic 1

David Ferguson (left) and Colin McClean are currently planning to add another 30 outlets to their Bob & Bert’s coffee shop chain.

 

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