Gerry Ford, chairman and chief executive of Caffe Nero, which yesterday acquired Harris + Hoole from Tesco for an undisclosed sum, has told MCA that the company had been “toying” with having a second brand for some time.
He said: “Harris + Hoole has a good tradition of high quality coffee and good momentum. We thought if we could get some good equity from that brand and make it run more effectively maybe it would be a jump start to another organisation that would be beneficial to our existing business.”
Ford said it was too early to say what Nero would learn from Harris + Hoole’s business, such as its higher food mix, or visa versa. On expansion he said: “You wouldn’t want to put them next to each other, but I don’t think they would canabalise each other if you had them in a shopping mall - there is room enough for both of them.”
He said that Caffe Nero, which operates c570 sites and has ambitions to grow to c750 in the UK, continued to perform well.
He said: “We have just launched our new financial year and we will open more stores than we ever have over the next 12 months, somewhere around 90 to 100 sites worldwide. It will be the first year we open more sites outside the UK than inside. That is not because the UK is slowing, expansion here will stay at the same rate, but the international side of the business is going strongly. The US is going well, we are in construction on our seventh site there and all our sites there are profitable.
“We are always scouting around for new territories but you won’t find us going into a multitude of countries, we won’t expand like that, but there might be one or two new markets we enter over the next couple of years. Somewhere we can really make a difference.”
In terms of taking the group’s new acquisition overseas, Ford said: “At the moment we will focus on Harris + Hoole in the UK, but years from now, who knows.”
Harris & Hoole currently operates 43 sites in both high street (12) and supermarket (31) locations.
Caffè Nero, which acquired three Harris + Hoole sites in a separate deal last year, intends to retain the Harris & Hoole brand and grow the business.
Tesco acquired the remaining stake in Harris + Hoole from the Tolley family, who set up the business with the retailer as a joint venture, earlier this year. It placed the business on the market earlier this spring.