Meet Malavika Hegde, From A Heartbroken Wife To Determined CEO Who Saved CCD From Dying

Be it weekend hangouts with friends, the first date, or treating your family with your first paycheck, Cafe Coffee Day was the mecca where a few hours turned into memories of a lifetime. But when the news of V G Siddhartha, founder of Cafe Coffee Day, India's largest coffee shop chain, dying by suicide in July 2019 surfaced it shocked everyone in the country. He died after jumping into the Netravati river near Mangalore. His body was found on the riverbank after a 36-hour search.

When Siddhartha was on his way to Sakleshpur in his car, he told his driver to stop the car on the bridge and told him to wait for him at the end of the bridge until he had come. After an hour when he did not show up, the driver called him but his phone was switched off then he called his elder son and informed him that his father is missing and then started the search operation.

V G Siddhartha, founder of Cafe Coffee Day | Photo: BCCL

After seeing the coffee culture around the world, Siddhartha, who hailed from Karnataka, planned to open a coffee shop and opened the first cafe in 1996 at Brigade Road in Bangalore. After all the difficulties, the coffee shop started.

Failing to create the right profitable business model

It was suspected from his last letter that he had committed suicide due to a debt crisis and loss of business. A typewritten note was released by ANI. In the note, Siddhartha seemed to be apologising for ¡°failing to create the right profitable business model.¡± He said that pressure from private equity partners and other lenders, and harassment from the income tax department had become unbearable. And yet Siddhartha wrote in his note: ¡°My intention was never to cheat or mislead anybody, I have failed as an entrepreneur.¡±

Malavika Hegde took over as CEO of CDEL

Many thought that the Coffee Day company would not survive after Siddhartha's death and questions abounded as to who would continue to run the company after him. People believed the company could not recover because of the accumulated debt. But Malavika Hegde, wife of V G Siddhartha, has shattered all the suspicion and achieved a milestone by saving CCD from disappearing despite being a single woman and mother of two sons.

malavika Hegde CEO of Cafe Coffee Day | Photo: Economic Times

In December 2020, Malavika took over as CEO of Coffee Day Enterprises Ltd (CDEL). From that day on she worked tirelessly for the growth of the company. In 2019, Coffee Day had a debt of over Rs 7,000 crore. This was a huge burden for Malavika who was in grief after losing her husband. But she never gave up.

About Malavika Hegde

Malavika, daughter of former Karnataka Chief Minister SM Krishna, was born in 1969 in Bengaluru where she completed her schooling and completed her engineering from Bengaluru University. She tied the knot with VG Siddhartha in 1991 and has two sons, Eshaan and Amartya.

Before becoming the CEO of Cafe Coffee Day (CCD), Malavika earlier served as a non-board member of CDEL for many years.

Malavika¡¯s letter to employee¡¯s

According to Times of India: In a letter to the company¡¯s 25,000 employees in 2020 before taking over as CEO of the company, Hegde wrote that she was committed to the future of the company and assured that the Coffee Day story was ¡°worth preserving¡±. Her letter came hours after a probe revealed that a private entity owned by late founder Siddhartha owed Rs 2,693 crore to the listed entity, Coffee Day Enterprises Limited (CDEL). ¡°We will work to reduce the debt to a manageable level by selling a few more investments as I am committed to the company¡¯s future,¡± she wrote.

The miraculous recovery of CCD under the leadership of Malavika Hegde

After Siddhartha¡¯s death by suicide, Malavika Hegde managed to reduce his debt even during the COVID lockdown. She had earlier said that the challenges increased but ¡°somewhere along the way in the last 12 months, my mission has been to uphold the proud legacy of Siddhartha. He has left me a job to do, to settle every lender to the best of my ability, to grow the business and to enthuse and foster our employees.¡±

Cafe Coffee Day | Photo: BCCL

CDEL had a debt of Rs 7,000 crore as of March 31, 2019. But as per CDEL's statement in August last year, the management was working hard to get the firm back on track after "substantial" debt reductions. It had mentioned in its annual report that its net debt was Rs 1,731 crore as of March 31, 2021. The report read, ¡°The total loan funds stood at Rs 1,779 crore which comprises long-term borrowings of Rs 1,263 crore and short-term borrowings of Rs 516 crore.¡±

The band brought down the debt to Rs 3,100 crore as of March 31, 2020, from Rs 7,200 crore in March 2019, without a single rupee haircut from lenders.

As a result of Malavika's initiative, Coffee Day's debt burden was reduced to Rs 1,731 crore by 2021. This is a great achievement. Malavika's goal is to make CCD a multi-billion dollar company without the debt burden. Following in the footsteps of her late husband, Malavika's dream has become to move coffee day shops to every corner of the country.

Even during Covid-19, CCD managed to grow

Since COVID-19 hit the world many businesses have been shut. But Cafe Coffee Day managed to grow even during the pandemic. All this has been possible because of the new CEO, Malavika of CCD who maintains the brand's value and build relations with many new investors to infuse capital into their business and is able to convince the investors that the brand of CCD was worth preserving.

Malavika Hegde with her husband V G Siddhartha | Photo: dare2compete

Various measures were implemented taking into consideration the COVID safety protocols across the entire chain of cafes. This helped to bring the customers, who have always found a place for CCD in their hearts, back to the cafes.

When many business tycoons are fleeing to foreign countries she decided to manage the firm and ensured to rebuild. Salute to her courage and determination.

CCD serving coffee across the country

Currently, Cafe Coffee Day (CCD) owns 572 cafes across the country, along with 333 CCD Value Express kiosks. It is a huge business with over 36,000 vending machines serving coffee to CCD customers.

Cafe Coffee Day (CCD), contributed 47 per cent of the consolidated net revenue. Logistics business accounted for 45 per cent of revenue, while the remaining 8 per cent was from logistics.

For more interesting stories like this, click here.