SEOUL, South Korea – A Seoul court said Friday it has approved the request by coffee chain Caffe Bene to begin restructuring of debt under a court receivership. The Seoul Central District Court made the decision on Thursday, two weeks after Caffe Bene filed for a court-led restructuring scheme amid burgeoning losses.
Launched in 2008, Caffe Bene grew to become one of South Korea’s largest coffee franchises, opening more than 1,000 stores in five years, but lost ground due to fierce competition in the saturated coffee market.
Caffe Bene has repaid 70 billion won (US$65.7 million), or 70 percent of its total debts, since 2016, when it was taken over by an equity fund and other foreign investors, but it is still suffering from financial shortages.
Rapid growth in the consumption of brewed coffee drove up the industry’s overall expansion in South Korea. The local brewed coffee market was estimated at around 8.8 trillion won (US$8.3 billion) last year.
In stark contrast to Caffe Bene’s decline, Starbucks Coffee Korea Co., the local unit of the U.S. coffee giant, surpassed the 100 billion-won (US$94 million) mark in operating profit for the first time last year.
