Costa Coffee Cup
Costa Coffee is going its own way.
Efforts are underway to separate the United Kingdom’s largest coffee chain from the larger Whitbread, a company that owns the Premier In hotel chain and restaurant interests. The move, as reported by The Guardian, would take two years to complete.
Alison Brittain, Whitbread’s chief executive, confirmed to move and told The Guardian that the concept had been under consideration for several years. The decision was made, in part, because both companies had strong prospects for growth overseas.
Costa Coffee has been operating in China for several years and Costa Express has installed more than 5,000 coffee vending machines worldwide. Whitbread, meanwhile, is expanding in Germany where it is projected to own 31 hotels in 15 cities by 2021.
“Given the significant strategic progress that has been made and the momentum in the delivery of the plan, the board is confident that both Premier Inn and Costa will soon be businesses of sufficient strength, scale and capability to enable them to thrive as independent companies,” she said.
Costa Coffee, with 2,400 coffee shops, could be valued as high as USD $4.3 billion.
“Coffee shops and hotel rooms don’t make natural bedfellows, so splitting off Costa Coffee from Premier Inn makes sense for Whitbread,” Laith Khalaf, a senior analyst at the investment company Hargreaves Lansdown, told The Guardian. “The breakup will provide each of the two emerging companies with greater strategic focus on their own goals and will allow investors to choose which of the two distinct brands they actually want exposure to.”