Bridgehead presses pause on T.O. expansion plans as in-store sales plummet during pandemic

Tracey and Steve
Aegis Brands CEO Steve Pelton (left) with Bridgehead's Tracey Clark. Photo provided

After the pandemic upended its ambitious plans to expand its iconic coffee brand beyond its home base, Bridgehead now says it’s “looking for opportunities to resume its growth outside Ottawa” in late 2021 or early 2022.

In financial documents filed on Tuesday, Aegis Brands ​– which acquired the prominent Ottawa coffee retailer in January ​– said the COVID-19 crisis derailed Bridgehead’s bid to open new stores in the Greater Toronto Area this year.

However, the parent company of Second Cup said Bridgehead is still going ahead with plans to unveil its first kiosk inside a Farm Boy store later this month at the grocer’s Ottawa Train Yards location. Under a partners hip with Carleton University’s Sprott School of Business, the chain also plans to open a location in Sprott’s new home on the Carleton campus next fall.

Spreading the Bridgehead brand beyond the National Capital Region was top of mind for former

CEO Tracey Clark when she announced she was selling the brand to Aegis late last year. 

Clark told OBJ last December the deal would give Bridgehead access to real estate and capital the company couldn’t have accessed on its own. She said Second Cup, with its 45-year history in the GTA, would be a valuable partner in helping her scout locations and negotiate leases with landlords. 

“The team is really ready for growth, and I think our values resonate now more than they ever have,” Clark said. “We’ll have access to real estate and to capital and to some shared services, and we’re really looking forward to it.”

But like countless other retailers across Canada, Bridgehead has seen its revenues crater since the coronavirus emerged earlier this year, forcing the chain to put its broader growth plans on hold. 

Same-store sales plummeted 44 per cent at Bridgehead’s locations in the third quarter compared with the same period in 2019, although its stores outside the core generally performed better, Aegis said.

“While the impact of the pandemic continues to be a challenge for the Bridgehead stores in the downtown core of Ottawa, (other) urban stores have rebounded nicely,” the company said in a statement.

Online sales spike

Meanwhile, Bridgehead’s online sales are expected to top $700,000 in fiscal 2020 – well above last year’s total of about $150,000 – and the chain added that it is making significant inroads in getting its products on to shelves at other retailers such as Costco and Farm Boy.

“The strength of the brand in Ottawa continues to drive significant increases in e-commerce and wholesale volume,” Aegis said, adding it expects Bridgehead’s wholesale channel to generate three times as many sales in 2021 as it did in 2019.

Aegis CEO Steve Pelton said he remains bullish on Bridgehead’s future.

“Considering the majority of the e-commerce sales are just in the Ottawa area where Bridgehead is based, these numbers are quite remarkable,” he said in a statement. “It is also exciting to think about what the brand can achieve as we start to expand into other parts of Canada.”

Bridgehead said 15 of its 19 stores in Ottawa have now reopened after closing during the first wave of the pandemic. The chain said it plans to reopen the remaining locations as the region recovers from the impacts of the virus.