SEOUL, April 5 (Korea Bizwire) – Once the biggest coffeehouse chain in South Korea, Café Bene now appears to be at a crossroads amid growing industry competition, after reports emerged the coffee giant suffered an operating loss of 13.4 billion won last year.
Marking its ninth year in 2017, Café Bene made a net profit of 81.7 billion won in 2015, but suffered an operating loss of 13.4 billion won and a net loss estimated at 33.6 billion won, the Financial Supervisory Service (FSS) reported yesterday.
The figures from 2015 show that Café Bene’s sales decreased by 33 percent, while its economic losses grew significantly.
As the company’s debt has grown larger than its capital, critics say Café Bene has reached the status of capital encroachment.
Since Café Bene launched its business back in 2008, the company at one point boasted the largest number of stores in the country, before a series of business failures including bakeries, Italian restaurants and drug stores in 2012 and 2013 took their toll.
In 2015, Café Bene hired Choi Seung-woo, a former director at Wongjin Food, as its new CEO in an effort to revamp its business and pull the company out of its downward financial spiral.
Unfortunately, efforts to get business back on track were thwarted by several failures in new markets including the U.S.
Some believe Café Bene has lost its place under the pressure of the ever-growing popularity of Starbucks and cheap coffee stands that now dot the streets of South Korean cities.
One official from Café Bene, however, disputed the claim and said the company still has hope.
“Last year’s operating loss was around 5.5 billion won, which was a great improvement from the 2015 figure of 43.8 billion won.
“The loss we suffered from our business in the U.S. was covered completely by the end of last year, and we are looking at ways to manage our operations more efficiently, such as improving our service and the current logistics system to boost profits at our branch in Times Square in New York City,” the official said.
Ashley Song (firstname.lastname@example.org)