Second Cup Ltd. had a $26.2-million loss in the third quarter, as the troubled specialty coffee company says it booked provisions for cafe closures and the impairment of its asset values.
The loss amounted to $2.65 per share, mostly due to a $25.7-million item that reflects the reduced value of Second Cup's trademarks.
On an adjusted basis, Second Cup's operations had a reduced profit of four cents per share – down about 64 per cent from last year's third quarter when adjusted earnings were 11 cents per share.
Second Cup also announced Monday that it plans to raise up to $5-million this month through a private placement of its stock, as part of a three-year plan to revitalize the Canadian specialty retailer's network of cafés and brand.
At the end of the third quarter there were 349 Second Cup cafés, two less than a year earlier and eight fewer than at the beginning of the quarter.
Second Cup has been faced with increased competition in recent years from high-end coffee retailers such as Seattle-based Starbucks Corp. and major restaurant chains such as Tim Hortons Inc. and McDonald's Corp.