Second Cup is changing its corporate name to Aegis as it branches out into cannabis
|National Post 08 Nov 2019 at 13:06|
The Second Cup Ltd. coffee house chain is changing its name as it prepares to boost its recovery and expand into other food services and cannabis.
It’s aiming to be called Aegis Brands Inc. after shareholder and Toronto Stock Exchange approval next year, the Mississauga, Ont.-based company said in a statement Friday.
“We created Aegis with the vision of building a portfolio of amazing brands that can grow and flourish with access to our resources and expertise,” Steven Pelton, who remains as CEO under the new name and president of Second Cup, said in the statement.
Some 350 Second Cup cafés spread across Canada since the company’s founding in 1975, but in recent years the brand lost its way and found itself deeply in debt with some franchisees declaring bankruptcy. The number of outlets plummeted from a high in the 1990s. A 2017 bailout by the backers of frozen yogurt store Yogen Fruz preceded a management shakeup and the appointment of Pelton in June. The chain faces tough competition from the likes of Tim Hortons and McDonald’s which dwarf the smaller Second Cup.
The company plans to open two cannabis stores in Calgary early next year in a joint venture with National Access Cannabis while preparing to expand into Ontario, Second Cup said in a separate statement Friday.
“Ontario is a great opportunity for a retail cannabis partnership to flourish,” Pelton said. “We believe location and service is key to winning when this market opens up, and we are well positioned for future success in this province.”
The name change comes as the company said it suffered a third-quarter loss after same-store sales fell 2.9 per cent from the same period a year ago.
Second Cup swung to a $762,000 loss and a $62,000 adjusted loss on $6.7 million in revenue compared with a $766,000 profit and $432,000 adjusted profit on $5.9 million in revenue during the same period in 2018, it said.
Second Cup’s stock slid 5 cents to $1.35 in TSX trading on Friday. The stock has dropped from a high this year of $1.87 in May, leaving the company valued at $27 million.
“I am confident in the team we now have in place to drive positive change in the experience for the Second Cup customers and franchisees,” Pelton said. “These experiences are foundational for the future of the Second Cup business.”
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