TORONTO — Alix Box, a former Holt Renfrew and Starbucks executive tapped to spur a turnaround at coffee retailer Second Cup, has abruptly left her role as chief executive.
The news on Wednesday came just two days before the restaurant chain’s annual meeting of shareholders and three years after Box joined the struggling coffee seller, founded in 1975. The company’s shares rose three per cent in afternoon trading Wednesday to $1.55.
Box, whose departure is effective immediately as well as her departure from the company’s board, was credited during her tenure with freshening up Second Cup’s store design and reviving its menu. After she joined Second Cup in February 2014, the coffee retailer outlined a plan to drive up efficiencies in the business and raise new capital as it cut head office employees and renegotiated agreements with its franchisees.
But Second Cup, with 290 locations across Canada, is still facing fierce and increasing competition from rival specialty players such as Starbucks and strong quick-serve restaurant operators such as McDonald’s, which has steadily increased its penetration of restaurant coffee sales since reformulating its Arabica brew in 2009. Box was also an important force behind the rollout of Starbucks in Canada, where she spent a decade working as its vice-president of operations until 2007.
For the year ended Dec. 31, the company reported a lower net loss of $975,000, or eight cents per share, compared with a net loss of $1,153,000 (nine cents) in fiscal 2015. Same-restaurant sales, an important measure of financial performance stripping out the effects of store openings and closings, fell 1.1 per cent in 2016 after falling 1.4 per cent in 2015.
“Second Cup today is a much better company than three years ago,” Michael Bregman, company chairman, said in a statement Wednesday. Bregman bought Second Cup in 1988 and later sold it to former owner Cara Operations Ltd. in 2002. He returned to Second Cup as an investor and chairman in 2014 with an eye to reviving the flagging business.
“We thank Alix for her leadership and contributions over the past three years. At this time, we are focused on capitalizing on the considerable potential to build value at Second Cup.”
Box has replaced by interim CEO Garry MacDonald, a former president of Country Style Donuts who joined the company’s board of directors earlier this year. MacDonald is currently also chief executive at Maccess Management International, a consulting firm that has worked with multi-brand food franchises such as Yogen Fruz, Pinkberry and Kahala.
Those brands are controlled by the Toronto-based investment firm Serruya Private Equity, which entered into a four-year, $8-million secured term loan with Second Cup in the fourth quarter through its affiliate, SPE Finance LLC.