Business
Second Cup Announces Major Restructuring to Enhance Franchisee Profitability
MISSISSAUGA, ON , June 19, 2014 /CNW/ - Today, The Second Cup Ltd. ("Second Cup" or the ...
About this update from Aegis Brands Inc
[{"type":"text","content":"\n\n\nMISSISSAUGA, ON, June 19, 2014 /CNW/ - Today, The Second Cup Ltd.\n (\"Second Cup\" or the \"Company\": TSX: SCU) President and CEO, Ms. Alix\n Box, announced significant first steps in the Company's revitalization\n strategy to improve its level of performance, and franchisee\n satisfaction and profitability. As previously disclosed, Second Cup,\n the Canadian specialty coffee retailer with more than 350 stores across\n Canada, has embarked on a journey of transformation to restore the\n Company to its place of prominence and greater profitability.\n Initiatives announced today include streamlining the organization and\n changing the Second Cup franchise economic model.\n\n\nCoffee Central Re-engineered\nAfter a complete organizational review, the Company has taken steps to\n reduce its infrastructure. This right-sizing of the Company was\n achieved by re-engineering its office, known as Coffee Central, in\n Mississauga to a more focused team, streamlining roles and\n responsibilities and creating new high-performing, multi-disciplinary\n positions.  The Coffee Central team is being reduced from 77 to 53\n employees. As part of this initiative, the Company expects to record\n one-time charges of approximately $1.5 million, mainly related to\n severance expenses, during the second quarter of 2014 and yield savings\n of approximately $2.3 million annualized.\n\n\n\"If we look back at the history of Second Cup, the Company had more\n stores and operated more effectively with a smaller Coffee Central team\n and lower overhead,\" says Ms. Box.  \"With this review we are correcting\n the imbalance and getting back to our entrepreneurial roots with a more\n efficient team who will make faster decisions and provide more\n responsive and better service to our franchisees.  Our new team is 100%\n dedicated to delivering the best specialty coffee experience and\n maximizing the long-term success of Second Cup.\"\n\n\nBenefiting Franchisees \nSecond Cup plans to redeploy the reduced expenses of approximately $2.3\n million annualized to increase franchisee profitability. This profit\n improvement is expected to result from a combination of royalty\n reductions, co-op marketing fee reductions and procurement savings. A\n typical store is expected to increase its annual profitability by\n approximately $14,800. Managemen...