Taiwan coffee chain Crown & Fancy to lay off most of its workers

Company cites crowded market as reason for layoffs, aims to reinvent itself as bean supplier

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(From Crown & Fancy's Facebook page)

(From Crown & Fancy's Facebook page)

Taipei, Aug. 23 (CNA) Crown & Fancy, a Tainan-based coffee shop chain, is planning to lay off most of its employees after the company suffered heavy losses amid escalating competition in the local coffee market, the Ministry of Labor (MOL) said Friday.

The MOL said Crown & Fancy will lay off 224 of its 283 employees around Taiwan effective Oct. 20. According to the MOL, the massive layoffs include 55 workers from its Tainan stores, 22 from its Taipei outlets, 32 from its New Taipei stores, 22 from its Taichung outlets and 93 from its Kaohsiung operations.

Wang Hou-wei (王厚偉), director of the MOL's Department of Employment Relations, told reporters that Crown & Fancy filed a report with the Labor Affairs Bureau of the Tainan City government Aug. 19 regarding the layoffs.

Wang said the layoffs show that Crown & Fancy could not stand more losses, as the local market has become crowded with coffee shops, with competition on the rise. However, the losses were not immediately available.

Wang said that in addition to the increase in the number of coffee shops in Taiwan, convenience stores in Taiwan also now sell brewed coffee, which has made it more difficult for Crown & Fancy to compete.

Currently, Taiwan has several large coffee shop chains, including famous foreign brand Starbucks and locally developed Louisa, Cama, and 85℃ Bakery Café chains. The 7-Eleven convenience store chain, which owns more than 5,000 outlets, is just one of the large convenience store chains in Taiwan offering low-cost coffee.

After the layoffs, Wang said, Crown & Fancy will transform itself into a coffee bean supplier.

According to its website, Crown & Fancy still has 34 stores islandwide. The coffee store chain said it will keep some of its outlets, largely in Kaohsiung, adding that it will develop into a dual business model to serve as an upstream coffee bean supplier as well as remaining a retail coffee shop operator.

Crown & Fancy kicked off its coffee shop business in Kaohsiung in 2000 and extended its reach to other major cities in Taiwan. In 2016, the chain was acquired by 3C distributor Tsann Kuen Enterprise Co., and the number of its outlets topped 70 at one point, with Tsann Kuen vowing to boost the number to 150.

Wang Hsin-chi (王鑫基), head of the Tainan City labor bureau, said that despite the layoff plan, Crown & Fancy was still paying its employees as usual, and management will start negotiations with its employees on compensation for the layoffs.

In addition, Wang said, the coffee shop chain will also consult with the affected employees about whether they are willing to work for its affiliates under Tsann Kuen, in which case the group will possibly help them transfer. Wang added that if the management and labor fail to reach an agreement, his bureau will intervene to provide assistance.