Coffee Republic announced today that Steven Bartlett, the former rebel shareholder who ousted the company's founder, Bobby Hashemi, in October 2006, is to step down as chief executive.

The coffee bar operator said that Mr Bartlett, who will become non-executive vice chairman, was leaving to "dedicate more of his time to his businesses and family in Plymouth".

Peter Breach, executive chairman, who will assume the job until a successor is found, said that Mr Bartlett would retain his shareholding, adding: "He remains part of the team."

Mr Breach said that his colleague would not be receiving a payoff. Asked why he was stepping down, he replied: "His expertise is the rejuvenation of businesses and retail change, and he felt he had achieved that at Coffee Republic."

Two years ago, Mr Bartlett used his 13 per cent stake to set up a shareholder action group demanding that Mr Hashemi provide better communication with small shareholders and make changes to company strategy.

The two men became embroiled in a row and Mr Hashemi, one of the people credited with bringing American-style coffee shops to the UK, stood down ahead of a shareholder meeting to oust him.

Under Mr Bartlett and Mr Breach, who joined at the same time, the emphasis has been placed on rapid expansion through franchising, both in Britain and internationally.

The chain currently has 191 outlets, of which 10 are overseas, mostly in the Middle East. In the UK it has 16 company-owned stores, 53 franchised bars and 112 concessions that serve Coffee Republic coffee.

In a trading update, the group said it was reviewing the carrying value of about half a dozen company-owned stores that had been performing poorly.

It reported a rise in like-for-like sales of 2.5 per cent in the first three months of the financial year, down from the 4.2 per cent growth reported at the end of last year.

Mr Breach said the performance was "pretty good, given the current economic climate", adding: "People may not be buying cars, but they still appear want to buy an affordable luxury like coffee."

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