Many of us would remember the shocking news of VG Siddhartha, CEO of India’s most famous coffeehouse chain, committing suicide in 2019. After her husband’s sudden demise, Malavika Hegde, took over the reins in December 2020. India’s biggest coffeehouse chain, CCD under her leadership brought the humongous debt of 7200 Crore down to 1731Cr in a short span of 2 years.
A typewritten note was found after Siddhartha’s death revealed how much he was under debt. He seemed to apologise in this note for “failing to create the right profitable business model.” It was at that moment, when Malavika Hegde decided to take over as the Chief Executive Officer (CEO) of CDEL in December 2020.
This was, undoubtedly, quite a courageous move on the part of Hegde. As of March 2019, CDEL had a debt of Rs 7,000 crore. Even though it was clearly a mountain of debt for Hegde to take care of, Hegde decided to stand up to her problems instead of running away and fleeing abroad. In order to preserve her late husband’s goal, the first thing Hegde had to take care of was to lower the company’s debt. Thousands of people’s jobs were at risk and she had to keep the firm viable. CCD had to fight against its rising competitors such as Starbucks and Barista. If it weren’t for Hegde, CCD wouldn’t have recovered this rapidly. According to Times of India, in a message to the company’s 25,000 workers, Hegde said that she was dedicated to the company’s future and ensured that the Coffee Day tale was “worth preserving”. Last year, CDEL said that it had reduced debt “significantly” to Rs 2,693 crore to the listed entity, Coffee Day Enterprises Limited (CDEL).
According to its annual report, the net debt of CDEL stood at Rs 1,731 crore as of March 31, 2021. It said, “The total loan funds stood at Rs 1,779 crore which comprises long-term borrowings of Rs 1,263 crore and short-term borrowings of Rs 516 crore. This was a considerable improvement in CDEL’s financial health. The company’s debt had stood at Rs 2,909.95 crore in FY 2020. CDEL would still want to improve further. But it has already managed to slash its debt burden significantly and is set to get back on track pretty soon. “
Amidst the Covid-19 outbreak, CCD maintained its growth, whereas the tyranny of the pandemic brought many businesses in India to their knees. The company successfully built relations with various new investors to infuse capital into their business. It took leverage of its existing brand image in India. With this image, the company was able to convince the investors that the brand of CCD was worth preserving.
However, now the question is what lies in the future for CCD? Café Coffee Day and its new CEO’s have successfully proved that VG Siddhartha’s tremendous legacy would not be wasted. If one follows the current trends, it is evident that the new CEO of CCD will be able to maintain the brand name in the Indian markets with her energetic and efficient leadership.