Gourmet Master Co (美食達人) plans to allocate about NT$1.8 billion (US$59 million) this year for capital expenditure to speed up the expansion of its 85°C (85度C) coffee and bakery chain in China and the US, officials said yesterday.
The company last year spent NT$1.5 billion on capital expenditure, spokesman Chris Lee (李翰霖) told an investors’ conference in Taipei, adding that it aims to increase its number of self-owned stores in China from 538 to 590 by the end of this year, and those in the US from 25 to 40.
Gourmet also plans to revamp its outlets by improving its product mixes and interior design, he said.
The company said it has been shifting its focus to selling coffee to ensure profits, especially in its largest market, China.
Revenue from the Chinese market accounted for 67 percent of Gourmet’s total revenue last year, while sales from Taiwan accounted for 18 percent and other markets made up the rest, company data showed.
“The company’s operating margin last year improved from 8.21 percent to 10.72 percent, thanks to increasing revenue contribution of beverages, which generally enjoy higher margins than bakery items,” Lee said.
To differentiate itself from its peers in China, the company said it will hire more baristas and provide freshly baked products in all its outlets there by the end of this year.
“We hope to gain a bigger market share by offering high-quality products at affordable prices,” Lee said, adding that the average selling price of its coffee in China is 40 percent less than its competitors.
Same-store sales at its Chinese outlets are forecast to grow about 2 percent this year from 500,000 yuan (US$72,615) per month, Lee said.
The company also expects its newly remodeled central kitchen in Kunshan in Suzhou, China, will enhance its automated production and reduce its logistics costs this year, Lee said.
Gourmet’s revenue last year increased 7.8 percent annually to NT$22.05 billion, with net income rising 52.9 percent to NT$1.74 billion, or NT$11.75 in earnings per share.
The company’s board of directors has proposed to distribute a cash dividend of NT$5 per common share this year, compared with NT$2.5 per share a year ago.
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