Whitbread appoints Rogers to lead Costa expansion

City A.M. Reporter
Whitbread said that Chris Rogers, currently group finance director, would take over as chief executive of its rapidly expanding coffee shop chain Costa Coffee in August, with a remit to drive international growth.

Whitbread, which also owns budget hotel chain Premier Inn, said Rogers will head up Costa's global business to drive forward a five year plan to increase the size of the business to 3,500 stores worldwide.

Costa is already Britain's biggest coffee shop brand with almost 1,400 shops and has a further 800 units in 25 overseas markets, including China and India.

The appointment of Rogers, who has been Whitbread's finance director for the past seven years, is likely to heighten talk that Costa could eventually be demerged but chief executive Andy Harrison re-affirmed the group's commitment to maintain ownership of the business.

"Costa has an exciting future within Whitbread and Chris will spearhead our ambitious growth plans, which will create substantial shareholder value," Harrison said in a statement.

Analysts have speculated that Costa could be spun out of Whitbread to realise value for shareholders, as it has few synergies with Premier Inn, the budget hotel chain that is the group's other major business.

Costa's current MD, John Derkach, is leaving Whitbread to become chief executive of British restaurant firm Tragus, the owner of Cafe Rouge, Bella Italia and Strada.

In an interview with Reuters in January, Derkach told Reuters that Costa Coffee should remain part of Whitbread to maximise opportunities for international expansion.

Costa Coffee was founded by Italian brothers Sergio and Bruno Costa, who opened a single cafe in Vauxhall, south London in 1971.

It has expanded rapidly since being purchased by Whitbread for £20m in 1995 taking advantage of the explosion in popularity of coffee shops in Britain.

In recent years, the business has continued to grow, despite harsh economic conditions, being seen as an 'affordable luxury' by many consumers.

Rival Pret A Manger said it would create 550 new jobs in the UK this year as it reported a 14 per cent rise in earnings before interest, tax, depreciation and amortisation (EBITDA) to £52.4m.