Store owners say they have been left thousands of pounds out of pocket following the collapse of Espresso Essential, which provides coffee machines and ingredients, ceased trading at the start of July. betterRetailing understands at least 50 stores have been searching for an alternate supplier already.
Espresso Essential provided machines for outright purchase or more commonly in independent shops – on one-to-three-year leases, with stores paying from £35 per week. Coffee and other consumables used by the machine are then delivered to order by DHL.
Often retailers were incentivised to take up the contracts with deals such as 500 free drinks and warranties on the machines. However, the leases were provided by a third party finance company – Henry Howard Finance. This means even though warranties and free stock deals are now unlikely to be honoured by Espresso Essential, stores are stuck paying for the machines.
One shop owner told betterRetailing: “I’m stuck paying £200 per month for a machine that isn’t even working properly, and I’ve got more than a year left on my contract. I’ve tried to explain the situation with Henry Howard but they said because the deal isn’t with Espresso Essential, there’s no way to stop paying it.” Another store owner responded: ‘Bang goes all the free stock promised too.’
A member of staff told betterRetailing: “It’s not been announced officially, but the company has definitely gone into administration. It’s awful, so many staff and customers are affected.” Another former staff member claimed that ‘a hell of a lot’ of independent shops would be affected. Though they didn’t know the exact number, they claimed it would be in the hundreds.
Ryan Gardiner, from rival lease-hire coffee machine and suppliers provider All About Coffee told betterRetailing: “We’ve had 20-30 orders related to Espresso Essential this week. We can supply the exact stock to work in their machines and we’ve got a 10% discount code for former Espresso Essential customers – ‘EESUP’.”
Gardiner also warned stores to check their machine’s requirements before buying supplies from providers. He commented: “Retailers need to be careful what replacement stock they put into the machines – for instance, you can get granulated milk at most wholesalers but if you put it in an Espresso Essential machine it will clog up because it’s thicker consistency.”
Esspresso Essential is registered as C.G.P.M Limited on Companies House. According to the most recent trading accounts for the year ending 31 May 2018, the amount owed by the company trading as Espresso Essential increased annually from £1,496,261 to £1,704,331. £509,230 was owed to trade creditors. No data is available for 2019.
The company is majority owned by David Marshall (80%), with minority holdings by Paul Dyson (10%) and Ellie Marshall (10%). David Marshall and Paul Dyson are still listed as directors, though Ellie Marshall was removed as a director on 31 March according to documents filed by the company.
betterRetailing was unable to speak to anyone from Espresso Essential when contacted. Espresso Essential in the UK is owned and operated separately to Espresso Essential in other markets such as Australia and New Zealand, which are unaffected.