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Java shuts two outlets, allays rumours of exit

BUSINESS
By Wainaina Wambu | October 8th 2021

Empty Java House in Kimathi Street, Nairobi [John Muchucha, Standard]

Coffee chain Java House has shut down two outlets less than a year after it laid off several employees.

Java House Aero Club based at Nairobi’s Wilson Airport will close down at the end of this month, while Java House Express on Peponi Road, Westlands ceased operations at the end of September.

A source at the coffee chain, which operates over 80 outlets across East Africa, told The Standard the two outlets were not attracting enough footfall to sustain business operations. The firm also sought to dispel speculation that it could be planning to exit the market. 

“This is to notify our guests and the general public, that we are not closing all our branches. The closure image dated October 29 making rounds was meant for Java House Aero Club at Wilson Airport only,” said Java House in a statement on its social media pages. In November last year, Java House asked scores of staff to “voluntarily resign” in a fresh wave of cost-cutting measures.

This came after the coffee chain slashed its employees’ salaries by 40 per cent in a bid to ride out the economic impact of Covid-19. 

In March, when restrictions to curb the spread of Covid-19 were introduced, Java House temporarily closed 14 of its coffee shops in Kenya as foot traffic fell.

Java House then noted that the pandemic’s impact on the food and beverage business was not abating any time soon even after restrictions were eased. “During the last few months we have looked at every aspect of cost reduction in the business, including re-negotiating rents, our procurement of raw material, our labour schedules and our utility costs and these are now moving towards a very low level in line with expected sales,” said the firm.

The hospitality industry has been one of the biggest casualties of the coronavirus impact.

Pre-Covid-19, Java House Group was on an expansion spree.

It also runs brands such as fast food joint Kukito, Planet Yogurt and 360 Degrees Pizza.

In 2019, the Competition Authority of Kenya approved the acquisition of indirect control of Abraaj Investment Management, which owns Java House, by British equity fund Actis.

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