Speciality coffee group Taylor St Baristas has appointed administrators, days after selling its café estate to Black Sheep, and abandoning a crowdfunding campaign.

Founder Nick Tolley said Taylor St was carrying too much debt, which had affected its ability to raise new capital.

The pioneering coffee group, founded by Tolley and two siblings, had recently disposed of its coffee shop estate, as part of a pivot from café operator to “full stack coffee business”.

Black Sheep retains the license to operate the Taylor St brand under the eight cafes it acquired for an undisclosed sum.

At around the same time, MCA understands the business pulled its £750,000 Crowdcube equity fundraise, after reaching less than a quarter of the target in a month.

Tolley told MCA earlier this week the group was exploring alternative funding options.

Meanwhile Sodexo, which is expected to open more than 100 branded Taylor St cafes, and a further 300 cafes under Taylor St-created proprietary brand Chapter & Verse, said it had been assured there would be no operational disruption or impact in its working partnership during the refinancing process. 

Tolley said in a statement: “Sadly, Taylor St’s carrying too much debt, which has affected our ability to raise new capital to support the ongoing development of the business.

“Whilst the underlying fundamentals of the business remain strong – and our customers and wholesale clients continue to love and engage with the brand – we’ve simply been unable to overcome a balance sheet that’s carrying too much debt.”

“As founders, we’ll do everything we can to support Taylor St’s licensees and partners and ensure no interruption to our customers and people through this administration process.”

A Sodexo spokesperson said: “As a Sodexo partner and innovative small business, we are sorry that Taylor St Baristas has gone into administration. We have assurances from Taylor St’s senior team that during the refinancing of the business there will be no operational disruption to the supply of Taylor St coffee and therefore no impact to our working partnership. We will of course remain in close contact with the company as they work through this process.”

Following the shops sale and a strategic review, Taylor St appointed administrators at David Rubin & Partners.

“Following a strategic review of the company’s finances, the directors concluded that the highly leveraged capital structure of the business was no longer sustainable, and that the balance sheet was carrying too much debt to facilitate ongoing trading,” joint administrator Asher Miller said.

“Consequently, facing insolvency, in order to protect the business the directors took steps to place the company into administration.”

The administrators will now conduct a marketing exercise to find buyers for all, or part, of the remaining business and maximise returns to creditors.

Due to the “strong” underlying fundamentals of the business, Miller expects to receive “substantial interest” from potential buyers in the coming weeks.

He added: “We are very positive about the prospects of achieving a sale, and indeed, even at this early stage we have already received expressions of interest from multiple third parties.”