Coca-Cola appoints restructuring advisors at Costa Coffee after failed sale attempt

Coca-Cola has appointed restructuring experts AlixPartners and Alvarez and Marsal at Costa Coffee following a failed attempt to sell the high street business last year, according to the Times.

AlixPartners is conducting an operational review of the coffee chain while Alvarez and Marsal is providing financial advice. Coca-Cola, which acquired the business from Whitbread for almost £4bn in 2018, abandoned its sale plans in January after a months-long auction failed to secure a buyer. According to the Times, private equity firms including KKR, TDR Capital and Bain Capital had considered bids before withdrawing from the process.

The outlet understands that the restructuring process could lead to cost-cutting measures at Costa Coffee, which operates around 2,700 stores in the UK and a further 1,300 internationally. The company employs approximately 16,000 people in the UK and also has a consumer products business supplying supermarkets. City sources told the Times that “Coca-Cola does not expect to put the chain back on the market imminently, but may later consider selling the business to existing franchisees”.

Costa Coffee has struggled to maintain profitability amid rising costs. The latest available accounts of the company revealed that its operating losses widened to £13.5m in 2024 on revenues of £1.2bn, compared with a £5.8m loss the previous year.

The Times said high street coffee chains have faced significant pressure from rising labour and energy costs. It also lost its position as the UK’s largest coffee chain to Greggs in the same month it scrapped its sale. Last summer, James Quincey, chief executive of Coca-Cola, told the Times: “Costa is not where we wanted it to be and has not quite delivered.”

Coca-Cola, Costa Coffee, AlixPartners and Alvarez and Marsal have been contacted for comment.