Godiva will shutter or sell its US cafes by the end of March

Dive Brief:

Godiva plans to close or sell all of its 128 cafés in North America by the end of March, according to a press release sent to Restaurant Dive. The closures include seven cafés that debuted with a full menu less than two years ago, according to Restaurant Business. The company did not disclose the number of employees affected by the closures.
The company said the decision to close its brick-and-mortar locations was made so it can focus more on how consumers want to experience the Godiva brand, including through online sales and through its grocery, club and retail partners.
Godiva's closure announcement is a sharp shift from its plan, which was announced in 2019, to open 2,000 cafés by 2025 and enter a segment crowded by heavyweights including Starbucks, Dunkin' and Panera.

Dive Insight:

Godiva may have been disproportionately affected by COVID-19 due to its experience-focused model, including walls of chocolate gift boxes and extensive displays of truffles. The company was set up similarly to Starbucks' café format with seating and electric outlets throughout its stores, but appeared to lack the same warmth as Starbucks and had a relatively high price point for a coffee shop, according to Business Insider.

The company also may have taken additional hits because of its locations in shopping malls — a sector that has been deeply affected by COVID-19 disruption. Twenty-five percent of the nation's malls are now expected to close by 2025, for example, according to Coresight Research.

Starbucks also struggled to grow sales during its fiscal 2020 with U.S. comparable sales declining 12% with transactions declining 21% despite an 11% growth in ticket sizes, according to an earnings release. Starbucks, however, increased its focus on off-premise offerings, announcing in September that it added curbside pickup to 800 U.S. stores and planned to more than double that number to about 2,000 in the next few months.

Godiva isn't the only café that struggled to translate from international markets. Le Pain Quotidien's U.S. arm filed for bankruptcy in May, sold itself to Aurify Brands and had to close dozens of its nearly 100 U.S. locations after expanding from the U.K. Godiva noted it will continue to operate in markets in Europe, the Middle East and China.