Merchant takes its wares to the UK, Qld

Western Australian café chain The Merchant Tea and Coffee Company will open two stores in the UK in the coming months as part of an international expansion of the group following its listing on a small-cap London-based equities exchange last year.

The Merchant Tea and Coffee Co, under the banner of The Merchant Group International (MGI), listed on the PLUS Markets Group exchange in June following a management restructure.

Under the restructure, former owner Mitchell Henderson relinquished day-to-day management and control of the company he bought in 2002 to current chief executive David Briffa.

Mr Henderson retained a 27 per cent stake in MGI through two related companies.

Mr Briffa told WA Business News MGI’s first UK-based Merchant Tea and Coffee House would open in May with a second to open in September.

While he did not disclose the proposed sites, WA Business News understands that the company has recently won a tender to open a cafe in St Albans Town Hall, which is located north of London.

It’s understood the site, in the refurbished town hall, was highly sought after by several big-name English and American chains to the punch.

The Merchant will join an increasingly competitive café market in the UK, with several big operators such as Pret A Manager, Starbucks and Café Nero dominating retail strips.

“The Merchant has a unique offering and story. It offers a warm and inviting colonial ambience that encourages the customer to sit and linger and enjoy the setting as well as the tea and coffee,” Mr Briffa said.

“The food will be markedly different to what is currently on offer in the UK with most 'grab and go' being characterised by mass produced food that is packaged in plastic, which is not something The Merchant is planning on doing.”

When MGI debuted on the PLUS Market, the café operator said it wanted to open seven stores in the UK by 2008 while at the same time expanding its Australian operations to 17.

Currently, The Merchant operates seven stores in WA and has been in the process of changing its business model from company owned stores to franchise operations.

Mr Briffa said the group was assessing the Queensland market for possible expansion opportunities.

In the meantime, more stores are planned for WA.

“We will be opening a store in Rockingham in April and we are currently assessing other sites around Perth,” Mr Briffa said.

The Merchant Tea and Coffee Co first opened in Perth in 1990.

Mr Henderson bought the store in 2002 after emigrating from the UK and set about expanding the operations.

He left his consulting role with the company in November and has since set up a venture capital fund.