Caffè Nero buys Brains' remaining stake in Coffee#1

Caffè Nero has agreed to acquire SA Brain's remaining 33% stake in Coffee#1, having originally bought 67% of the coffee chain in 2019 from the Welsh brewer.

Coffee#1 operates 102 stores across Wales, the Midlands and Southern England. Since buying the majority share of the business in 2019, Caffè Nero has managed the brand.

The group said Coffee#1 had averaged 104% of pre-pandemic sales over the last four months and the plan was for it to continue to operate as a standalone brand alongside the Nero Group's other brands: Caffè Nero, Harris+Hoole and Aroma.

Gerry Ford, group chief executive of the Nero Group, said: "We've been delighted with the performance of the Coffee#1 business since it joined our group in 2019. It is a fantastic brand with an emphasis on great coffee and service combined with a local community-based feel, which matches perfectly with the ethos of the Nero Group. As we emerge from the pandemic, our intention is to return to growing stores in our group and investing in growth opportunities. Coffee#1 is very much part of that thinking. Acquiring Brain's remaining position is the first step of this post-refinancing growth phase."

Caffè Nero said its refinancing process in January had "given it a platform for growth, with the further stake acquisition in Coffee#1 part of its growth strategy.

Caffè Nero completed a £330m debt refinancing in January, effectively ending a takeover bid from the Issa brothers' EG Group. Last April Mohsin and Zuber Issa, who own the Leon restaurant chain, acquired £160m of Nero Holdings' mezzanine debt, which they used to try and gain control of the company from Ford, and backed a legal challenge to the coffee chain's company voluntary arrangement (CVA), but a judge dismissed the case.

The Nero Group operates over 1,000 stores across 10 countries with more than 650 Caffè Nero stores across the UK and 5,500 employees.

James Shapland founded Coffee#1 in 2001 and sold it to SA Brain in 2011.