Espresso Royale, a 14-café coffee chain centered in American university cities across the Midwest, has shut down operations leaving 227 employees without work.
The closure is directly tied to the Covid-19 pandemic, a company official said. And with no clear indication whether students would be returning in September, the company could no longer stay in business.
The company, based in Ann Arbor, Mich., also operated three bakeries, a roasting facility, and a catering company to support the café and generate additional sales. Coffee was sold in grocery stores, online, and distributed under private labels.
But the forced pandemic closure of major university campuses in Ann Arbor and East Lansing, Mich., Madison, Wisc., and Champaign/Urbana, Ill., was too much to overcome, company c.f.o. Jonathan Martin told STiR.
Martin said Espresso Royale did not have the advantage some other coffee chains enjoy. While drive-thru sales could help support other businesses, Espresso Royale relied on college students who came into shops and stayed to socialize and study for extended periods of time.
“It wasn't certain we would have to close permanently until very recently,” Martin said this week. “We pursued various strategies to somehow keep some operations viable. Unfortunately, our lease costs and the total liability on those long-term leases were too much for us to handle, having been shut down since mid-March.“The biggest problem is the uncertainty,” he said. “The uncertainty of when things might reopen, and the uncertainty of what conditions will be like when things do reopen were huge problems.”