Crown&Fancy (金鑛咖啡), a coffee shop chain based in Tainan, is to lay off most of its employees after posting heavy losses due to escalating competition in the local coffee market, the Ministry of Labor said yesterday.
The company is to lay off 224 of its 283 employees across Taiwan: 55 from its Tainan stores, 22 from its Taipei outlets, 32 from its New Taipei City stores, 22 from its Taichung outlets and 93 from its Kaohsiung operations, the ministry said.
The layoffs are to take effect on Oct. 20.
Wang Hou-wei (王厚偉), director of the ministry’s Department of Employment Relations, told reporters that Crown&Fancy on Monday filed a report with the Tainan Labor Affairs Bureau regarding the layoffs.
The layoffs show that Crown&Fancy could not withstand further losses, with other brands opening more stores and overall competition on the rise, Wang said.
However, reports of the exact revenue loss were not immediately available.
Wang said that in addition to the increase in the number of coffee shops in Taiwan, convenience stores in Taiwan also sell brewed coffee, which has made it more difficult for Crown&Fancy to compete.
Currently, Taiwan has several large coffee shop chains, including the famous US brand Starbucks, as well as locally developed chains such as Louisa (路易莎), Cama (咖碼) and 85°C (85度C).
The 7-Eleven convenience store chain, which owns more than 5,000 outlets, is just one of the large convenience store chains in the nation that offer low-cost coffee.
After the layoffs, Crown & Fancy will become a coffee bean supplier, Wang said.
On its Web site, Crown&Fancy still lists 34 stores in Taiwan.
The chain said it will keep some of its outlets, mostly in Kaohsiung, and it will develop a dual business model to serve as an upstream coffee bean supplier as well as remaining a retail coffee shop operator.
Crown&Fancy launched its coffee shop business in Kaohsiung in 2000 and extended its reach to other major cities in Taiwan.
In 2016, the chain was acquired by 3C distributor Tsann Kuen Enterprise Co (燦坤) and the number of stores topped 70 at one point.
Tainan Labor Affairs Bureau head Wang Hsin-chi (王鑫基) said that despite the layoff plan, Crown&Fancy was still paying its employees as usual and management would start negotiations with its employees on compensation for the layoffs.
The chain will also consult with the affected employees whether they are willing to work for its affiliates under Tsann Kuen, in which case the group will help them with a possible transfer, Wang said.
If management and labor fail to reach an agreement, the bureau will intervene to provide assistance, Wang said.
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