30 July, 2008 - It seems that Starbucks is not the only coffee company facing problems after Scottish coffee chain Beanscene went into administration yesterday after building up “unsustainable” overheads.
The company, which employs 142 people and has 14 stores across Scotland, only changed hands in April but the new owners called in administrators KPMG Restructuring after failing to find cash to fund their investments.
A Beanscene statement said: "Despite a turnover of £4m, the business had built an overhead base which was not sustainable by its 14 units.
"Add to this the costs of five leases which had been entered into for premises that were not fitted out or trading and the result were bottom line losses, which have continued into the current year.
"As part of a restructuring plan, ownership transferred in April 2008 to new backers and a significant injection of funds was made.
"With an unexpected change in circumstances, the new backers were unable to make further planned cash injections, resulting in the directors having no option but to place the company in administration."
The administrators said they were hopeful a new buyer could be found for the business and a quick sale completed.