How Café Coffee Day was saved by CEO Malavika Hegde

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Meet Malavika Hegde, from a heartbroken wife to determined CEO who saved CCD. Malvika brought CCD back in the race with her hard work and dedication, after the shock of her husband’s death and the company in debt of 7000 crores. She brought good days with strong intentions. After the death of VG Siddhartha, wife Malavika got CCD out of crores of debt and put her in the race again.

 

In the year 1996, VG Siddhartha, a resident of Karnataka (VG Siddhartha) had started Cafe Coffee Day, In view of the growing coffee culture in the country.Whether it was weekend getaways with friends, a first date, or giving your family your first paycheck, Café Coffee Day was where you would head to create unforgettable memories. But when news surfaced of VG Siddhartha, founder of Cafe Coffee Day, India’s largest coffee shop chain, who committed suicide in July 2019, it shocked everyone in the country. He died after diving into the Netravati River near Mangalore. His body was found by the river after a 36-hour search. When Siddhartha arrived at Sakleshpur in his car, he told his driver to stop the car at the bridge and told him to wait for him at the end of the bridge until he arrived. After an hour without showing up, the driver called him but his phone was switched off then he called his eldest son and informed him of his father’s disappearance and then began the search. Then on July 31, fishermen found his body on the banks of the Netravati river near Mangalore.

 

Malavika Hegde is the daughter of former Karnataka Chief Minister SM Krishna. she was born in 1969 in the city of Bangalore. she was married to VG Siddhartha and was a non-executive board member of the company. Reportedly, when Siddhartha had told his wife that he will be charging INR 25 for a cup of coffee that was locally available for INR 5, she had laughed at his proposition. After modifications like adding internet surfing to his coffee plan, the first shop was opened in 1996 on Brigade Road in Bangalore.There are 572 cafes owned by the company in 165 cities of India. The total number of vending machines serving coffee to CCD customers was 36,362.

Post Siddhartha’s death, a typewritten note was released by the media. In the note, he was apologising for failing. The note stated him apologising for “failing to create the right profitable business model” and the kind of pressure he was under from the private equity partners and other lenders. He wrote about the harassment from the Income Tax department, which had become unbearable for him.

 

Siddhartha’s death had sent trembles to the business community and it broke his wife too. They have been married since 1991 and Hegde has been a witness to his ideas and business launch. But she pulled herself together and focused on maintaining his legacy and remembering him this way. In July 2020, she made her first public statement and addressed the 25,000 employees of the giant company and stated, “Resolutely committed to the future of Coffee Day as a going concern,” and assured that the Coffee Day was “worth preserving.”

 

As of March 31, 2019, Cafe Coffee Day had a debt of around Rs 7000 crore. Malvika did not lose courage. She was determined to fulfill her husband’s dream of making CCD a successful business model and started working. She was also very understanding of the responsibilities and conditions of thousands of personnel working in CCD.The process of reducing the debt was not magic. It demanded hard work and complete dedication by Hegde. According to sources, the company paid Rs 1,644 crore to its lender. They accepted an amount from US private equity giant Blackstone and sold a stake in Mindtree, which helped in reducing the deficit.

 

Hegde reportedly entered into a share purchase agreement with reputed companies and was thus able to reduce their debt further in an economic environment where businesses were flopping due to pandemics and lockdowns. Since COVID19 hit the world, many businesses have been shut down. But Cafe Coffee Day has also managed to grow during the pandemic. This was all possible thanks to the new CEO, Malavika of CCD, who maintains the brand value and builds relationships with many new investors to inject capital into their business and is able to convince investors that it was worthwhile to preserve the CCD brand. Various measures have been implemented taking into account COVID safety protocols across the entire coffee chain. This helped bring customers, who have always found a place for CCD in their hearts, back to cafes. When many business tycoons fled abroad, she decided to run the business and made sure to rebuild it. A tribute to his courage and determination.

 

<font face="Georgia, serif">Malavika Hegde pulled CCD up and continues in her effort to reduce the debt while ensuring the smooth functioning of its outlet across the country and keeping up its competition with other coffee shops like Starbucks, among others.</font>