Coffee Republic today suspended its shares "pending clarification" of its financial position as administrators prepared to swoop on its UK business.

Advisors from Osborne Clarke, the law firm, have been called in to the coffee shop chain, pending the appointment of administrators. Coffee Republic had asked for its shares to be suspended on Friday evening after the close of trading.

The company suffered a £527,000 loss in the six months to September 28 but said that it was successfully free of bank debt.

Coffee Republic, which has about 200 stores worldwide including franchises and independent outlets that serve its coffee. It found itself in trouble after a period of rapid expansion.

Its founders, Bobby and Sahar Hashemi, a brother and sister team, opened its first store near Bond Street in central London in 1995.

Shares in Coffee Republic, which have lost two thirds of their value over the past year, closed up 2 per cent at 22p on Friday, valuing the business at £2.8 million.

Steve Bartlett, a former rebel shareholder who became chief executive last year, said that the chain hoped to rid itself of poorly performing stores in a restructuring programme.

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