BREA, Calif. - Reborn Coffee, Inc. (NASDAQ: REBN), a specialty coffee retailer, has announced the acquisition of a 58% interest in Bbang Ssaem Bakery, a South Korean bakery chain with 31 locations. This strategic move follows a memorandum of understanding and is aimed at expanding Reborn Coffee's product offerings and establishing a presence in the bakery sector.
The acquisition enables Reborn Coffee to enter the South Korean franchise market with a combined high-end café and bakery concept. Bbang Ssaem's trailing twelve-month revenue through November 2024 stands at an estimated $7 million, and the partnership is expected to leverage synergies between the companies to drive revenue growth.
Reborn Coffee's franchise initiative seeks to empower local entrepreneurs by offering a scalable business model that delivers premium coffee and bakery experiences. The company aims to rapidly expand across South Korea, enhancing brand reach and attracting new customer bases, which could create growth opportunities for Reborn Coffee and its franchise partners.
Funded by accredited investors in Korea, the acquisition reflects market confidence in Reborn Coffee's growth potential. The integration of Bbang Ssaem into Reborn Coffee's operations is intended to meet consumer demand for artisanal baked goods and premium coffee.
Jay Kim, CEO of Reborn Coffee, stated that the acquisition combines Bbang Ssaem's bakery expertise with Reborn Coffee's specialty coffee to create a distinctive market offering. He added that the franchise model will facilitate collaboration with entrepreneurs to deliver premium experiences throughout South Korea.
Reborn Coffee plans to upgrade select locations in South Korea to reflect the new high-end café bakery model, responding to the growing demand for quality food and beverage options. The company anticipates that this enhanced concept will contribute to sustained growth and profitability.
About Reborn Coffee, Inc.: Reborn Coffee is a company that focuses on delivering high-quality, specialty-roasted coffee through retail locations, kiosks, and cafes. The company prides itself on innovative techniques in sourcing, washing, roasting, and brewing coffee beans. This acquisition marks a significant step in Reborn Coffee's strategy to expand its brand footprint and offerings.
This news is based on a press release statement.
In other recent news, Reborn Coffee Inc. has made significant strides in its business operations. The company's recent annual meeting saw the re-election of six board members and the ratification of BCRG Group as its independent registered public accounting firm for the upcoming fiscal year. The company also unveiled its award-winning eco-friendly product, the Reborn Tumbler, designed by Nooof.
Reborn Coffee has expanded its global footprint by announcing a joint venture with Gaingan Humantech Co. LTD to open three new locations in Bangkok, Thailand. Additionally, the company has secured a $500,000 investment through a convertible note from Quen Inno Tech Co., Ltd.
Reborn Coffee has also entered into several strategic partnerships to extend its presence in China. It has signed a Master License Agreement with Chengdu Octaday Entertainment Group and Shenyang Yongsheng Seven Stars Tourism Development Co. to open stores in Sichuan Province and Shenyang, respectively.
The company has made a significant move by acquiring Bbang Ssaem Bakery, marking its entry into the combined coffee and bakery market. However, Reborn Coffee faces potential delisting from the Nasdaq Stock Market due to a delay in filing its quarterly financial report. These are the latest developments in Reborn Coffee's growth and expansion strategy.
InvestingPro Insights
Reborn Coffee's acquisition of Bbang Ssaem Bakery comes at a critical time for the company, as revealed by recent InvestingPro data. Despite the company's ambitious expansion plans, Reborn Coffee faces significant financial challenges. The company's market capitalization stands at a modest $6.04 million, reflecting investor caution.
InvestingPro Tips highlight that Reborn Coffee "operates with a significant debt burden" and "may have trouble making interest payments on debt." These factors could potentially impact the company's ability to fully capitalize on the Bbang Ssaem acquisition and its franchise expansion plans.
On a positive note, Reborn Coffee has demonstrated strong revenue growth, with a 32.67% increase in the last twelve months as of Q2 2024. This aligns with the company's strategy to boost revenue through the new acquisition. Additionally, Reborn Coffee boasts "impressive gross profit margins" of 69.19%, which could be further enhanced by integrating Bbang Ssaem's bakery offerings.
However, investors should be aware that Reborn Coffee is "not profitable over the last twelve months" and analysts do not anticipate profitability in the current year. This underscores the importance of the company's efforts to drive growth and achieve economies of scale through its expansion strategy.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips for Reborn Coffee, providing a comprehensive view of the company's financial health and market position.
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