Sources inform ''Globes'' that Israeli cafe chain Arcaffe plans to establish a chain of cafes in New York under its brand. Arcaffe plans to register a company in the US and bring in a US investor, who will own half of it. Arcaffe will provide know-how and management, while the US investor will provide financing.
Sources also inform ''Globes'' that Arcaffe's business plan calls for the establishment of 15 branches in the first stage. Arcaffe will compete against Starbucks (Nasdaq:SBUX) in New York, by positioning itself as a European chain bringing an Italian flavor to the city. It will not represent itself as an Israeli chain. The US chain will be managed by one of its Israeli managers currently employed by the company.
Arcaffe CEO Tamir Barelko, who owns 8% of the chain, confirmed the report to ''Globes''.
Barelko said the uniqueness Arcaffe will bring to the US market was its Israeli concept of "fast gourmet". "New York lacks cafes that offer food. What's great about the city is that if you can make it there, you can raise a great deal of capital and find the high-quality human resources to duplicate the success in Israel, where Arcaffe beats the American cafe brands," he said.
In response to a ''Globes'' question about the value of the US chain for the US investor, Barelko said a valuation estimate was now being carried out. He added that Arcaffe hired the services of a US gastronomic consultancy firm in order to adapt its concept to American tastes.
Commenting on negotiations held in Israel to find a strategic investor from among the food companies, Barelko said, "The Israeli company is not looking for an investor at this time, since it obtained bank financing for all its business plans in Israel, including establishing a plant and new branches."
Arcaffe has ten branches in Israel. The tenth branch was opened in Ramat Hahayal at an investment of NIS 2.5 million.
Arcaffe's annual turnover is estimated at NIS 46 million. Its owners are Kobi and Sarah Shemer (76%), Arcaffe Italy (16%) and Barelko (8%), who serves as CEO.
As reported by ''Globes'' in July 2001, Arcaffe's shareholders asked for $8 million to sell to Starbucks, when the latter made an offer before entering the Israeli market.
Published by Globes [online] - www.globes.co.il - on May 29, 2002