Sector: Food Retail, Date: October 2009
http://www.costa.co.uk/
A brand as strong as Costa needs little introduction, with the Costa Coffee enterprise currently operating over 750 stores across the UK, as well as having a presence in over twenty countries internationally.
As with any retail operation, store location is an absolutely crucial factor for success and difficulties in identifying suitable locations is a key factor inhibiting growth. However, current economic difficulties have created some valuable openings in prime retail shopping districts allowing astute entrepreneurs to snap up locations which ordinarily would be much more difficult to obtain.
Hoosein Dadabhoy is an existing franchisee of the Costa brand, successfully operating five stores around the Midlands area. Spotting an opportunity to increase his portfolio of stores, Hoosein was keen to open in the quaint market town of Kettering where he has identified an ideal location for a new store after many months of searching. In spite of having access to bank finance, Hoosein strongly preferred an equity partner able to provide Sharī‘ah-compliant finance.
Hoosein comments, “Being able to structure the finance for the new store on an equity rather than interest basis, allows me not only to behave ethically, but also to fairly share the risks involved in opening a store, without having to worry about excessive bank loans.”
The financial support provided via 1st Ethical has allowed the business to focus properly on long term growth plans whilst providing investors with a sound venture to participate in.
With the strength of a brand such as Costa, and the security provided by equity finance where returns are only made once profits are achieved and not before, Hoosein is well placed to continue growing his business even in the teeth of a severe recession.