Blank Street Coffee auditors warn account figures may be ‘misstated’

Blank Street Coffee’s auditors raised questions about stock levels that could be “materially misstated”, newly filed accounts show, as the cafe chain made a £2.9 million loss in its first six months in the UK.

The venture capital-backed coffee shop, founded in New York in 2020, launched in the UK in June 2022. It quickly became almost unavoidable in central London, opening 14 shops in 2022 followed by another 15 in 2023.

Turnover between launch and the end of 2022 was £1.9 million with 150,000 customers served.

But costs of sales outstripped the turnover figure, putting the business in the red even before administrative costs. The final loss was £2.9 million.

Auditors Gravita said they were appointed too late to be present for counting of stock, taking on the role in 2023, and were “unable to substantiate” stock figures by other means.

Any numbers in the accounts that relate to the stock balance, Gravita said, could therefore be “materially misstated”.

The balance sheet shows the company held stock that it valued at £142,068 at the end of 2022.

Blank Street boss Issam Freiha told the Standard: “Blank Street opened its first store in the UK in June 2022, and so the published financial statements reflect our first six months of trading in the UK. As is true of many young businesses, the first few months are a key time to set up systems and processes, including those that track and manage our inventory to perfect certainty.

“We don't have any concerns on the topic, or accounts.”

In the accounts, Blank Street also revealed plans to launch a subscription service, which would likely be similar to the offering from Pret a Manger, which offers five drinks a day and a discount o n food for £30 a month.