Beanscene plunges into administration

Jul 28 2008 By Greig Cameron

Coffee house chain where KT Tunstall launched her career hit by losses

Administrators are trying to find a buyer for Beanscene, the live music and coffee bar chain where pop star KT Tunstall launched her career.

The Glasgow headquartered company which has 14 outlets and employs 142 staff is continuing to trade while a purchaser is being sought.

Gordon Richardson, who founded the chain in 1999 but quit four months ago after selling the business to smaller rival Tinderbox, says he is considering making a bid.

Administrators KPMG Restructuring said despite a turnover of £4m, the business had built an overhead base which was not sustainable by its six units in Glasgow, four in Edinburgh and one each in Stirling, St. Andrews, Hawick and Ayr.

“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,” it said.

 “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.”

“With the ongoing support of employees, customers, landlords and suppliers the Administrators are now actively seeking a buyer for the business.”

Blair Nimmo, joint administrator and head of restructuring for KPMG in Scotland said: “The opportunity now exists to acquire a strong brand name, based on quality coffee delivery in a relaxed ambience. We remain hopeful that we can find a buyer for the business and effect a quick sale of the company and its assets.”

Richardson said he was “gutted” to hear that Beanscene has gone into administration.

“A very passionate and talented team of people worked exceptionally hard, tirelessly, for nine years to create a truly unique brand with lasting appeal in a very competitive marketplace.

“At the time of my departure in March, I had just overseen the completion of a £1.5m investment which set the company up  fantastically to strengthen its Balance Sheet, open six new stores and to go forward and unlock the brand’s full potential.

“I’m currently looking at options with a view to reacquiring the Beanscene brand and business, my belief in which remains bullet-proof.”

Richardson who fronted pop bands Pride and King Hash in the 1980s had big ambitions for Beanscene and in 2002 said he wanted to have 100 coffee and music houses around the UK.

He also created the Luna record label to feature the regular acts at the chain.

As well as KT Tunstall, former Squeeze singer Chris Difford performed in the coffee houses.

In June Richardson launched Pico, a New York City-style deli and coffee house in Glasgow and has plans to open another six outlets.