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BB’s Coffee & Muffins: has long-term plans to have 400-plus stores in the UK and Eire

Coffee Break

Published:  01 September, 2005

As BB’s profits continue to grow so does the company’s portfolio

Famous for its freshly baked produce and its affordable prices, BB’s Coffee & Muffins is a popular choice of tenant for shopping centre owners.

Currently occupying 105 stores, predominantly in the shopping centre sector, the company is on target to open 25-plus new stores this year and a further 25 in 2006.

Having stuck rigidly to its winning formula, BB’s managing director Phil Abbott says freshness is the company’s unique selling point. Everything BB’s sells - from baguettes and sandwiches to muffins and pastries - is baked on the premises. The company also sells New Zealand Naturals ice cream, frozen yoghurt and sorbets.

“Our goal at the moment is 50 stores within the next two years,” says Abbott. “We are looking at more designer outlet villages – we have opened a few there – and we are looking at good quality retail parks, but the main emphasis is in shopping centres. It’s where we fit nicely and is where we are very comfortable.”

The majority of the company’s stores are franchised and that’s the way Abbott wants to continue. In fact he has a lot of interest from new, as well as existing’ franchisees looking for multiple sites.

“Probably the area we haven’t really suceeded in is the south-west and Wales,” he says. “There is certainly a focus there at the moment but we are looking at anywhere there is a quality centre or the right opportunity.”

Abbott’s long term vision will see 400-plus stores throughout the UK and Ireland and further stores abroad.

“We are looking to move into Europe,” he adds. “We have one site in Germany and we will look at others but we are looking for local partners. We will look at countries with a good content of shopping centres, such as France, Spain and Portugal, more so than Benelux. A lot of our UK landlords have shopping centres in those countries.”

BB’s is also extending its sales channels within existing shopping centre sites by taking satellite pods and kiosks, which are run in conjunction with the store. Abbott says he can be very flexible with the landlord and is happy to change locations to suit seasonal demand.

“We both win,” he says. “We get sales and they get income. It’s early days but it is working. At the Haymarket in Leicester the kiosk we have only just opened is doing very well and the pods in Ireland, that have been open for 12 months, are also doing well.”

He says BBs’ popularity with landlords lies in its ability to complement premier brands, such as Starbucks, with its value offer, which he believes appeals to the typical shopping centre customer. “Landlords are happy as we add to their tenancy mix,” he adds.

BB’s expects to make a healthy profit this year.

Franchise focus:

Phil Abbott brought the BB’s Coffee & Muffins’ brand over to the UK and Ireland from Australia in 1995.

The first store was opened in Maidenhead in 1997, before Abbott opened stores in Watford, Blackburn and then Cribbs Causeway.

He says: “The first two years were reasonably slow but momentum has now built year after year.

“The business we have is very much franchise-led. It is the model that we brought from Australia and it works for us.”

BB’s has 17 company stores, which was a venture capital investment, but Abbott says this format didn’t suit the business. Instead its main focus remains on franchising where it retains ownership of the brand and sub-lets centre outlets to franchisees.

BB’s Coffee & Muffins - Factfile

Group turnover: £30m

Like-for-like sales: 10 per cent up

Number of stores: 105

Average store size: 1,100 sq ft

Total selling space: 120,000 sq ft

Stores in shopping centres: 95 per cent

Letting agents: Harper Dennis Hobbs, Lisney and HOK

Managing director: Phil Abbott

Finance director: David O’Connor

Brand general manager: Michelle Young

Address: Charter House, Brent Way, Brentford, Middlesex TW8 8ES

Phone: 020 8758 1234

Website: www.bbscoffeeandmuffins.com