A TWOSOME PLACE (hereinafter A TWOSOME), a coffee franchise that operates 1,750 stores in Korea, is entering the U.S. market with its signature cake "Scho-Saeng (strawberry chocolate fresh cream)" at the forefront. Judging that growth potential in the domestic coffee market through additional openings is limited, it plans to open more than 10 company-operated stores in the United States to establish a new growth base.
On the 3rd, A TWOSOME held a press briefing at Conrad Seoul in Yeouido, Seoul, and said it will open its first U.S. store in October on King Street in Old Town, Alexandria, Virginia. The first store will be about 73 pyeong in size and will have 78 seats including an outdoor terrace, selling more than 80 items, including 33 cakes, 31 beverages and eight deli items.
The top product it will push in the U.S. market is Scho-Saeng, which sells more than 3 million units a year. Moon Young-joo, A TWOSOME CEO, said, "When I first came to A TWOSOME in 2023, I wondered, 'Why don't our cakes have names?'" and added, "Just as McDonald's has the Big Mac and Burger King has the Whopper, we ran a promotion to create a named cake, led by Scho-Saeng, and it has now become the product that represents the brand."
Brand realignment centered on Scho-Saeng led to improved performance. Last year, A TWOSOME's sales rose 36% and operating profit rose 66% from 2022. During the same period, annual same-store sales growth also increased by 7.3 percentage points.
Based on these domestic business results, A TWOSOME will make overseas markets a new growth pillar starting this year. It entered China in 2011, when CJ Foodville operated the brand, and once ran more than 40 stores, but withdrew from the China business in 2022. This entry into the United States is a renewed attempt at overseas markets four years after the China exit.
This time, it is highlighting the "combination of cafe and cake" as a differentiator. Kim Shin-young, A TWOSOME executive vice president, said, "A TWOSOME is perceived as a cafe, not a bakery or cake house, but the transaction value per customer is high because of the cakes, and there is a lot of foot traffic because it is a cafe," and added, "Even globally, it is rare to see a large cafe selling cakes like this."
Unlike U.S. butter- and cheese-based cakes, A TWOSOME sees a competitive edge in Korean-style cakes that are relatively light and soft, using fresh cream, mousse and fresh fruit. Kim said, "If we had entered overseas markets with only coffee or beverages, it would have been difficult," and added, "Cakes allow for a much wider scope to express Korean characteristics."
The first U.S. store will sell cakes featuring dalgona, black sesame and injeolmi, as well as misutgaru frappes and maesil drinks. It will also offer meal items such as bulgogi toast and bibim bowls, operating as an "all-day cafe" available from morning to evening.
In the initial stage, all U.S. stores will be operated by a local corporation. It is currently planning more than 10 stores, mainly in major cities on the U.S. East Coast. Kim said, "In the United States, it costs roughly 1.5 billion to 2 billion won just to open one store," and added, "Once the company-operated business stabilizes and profitability is secured, we are leaving open the possibility of a franchise model in the future." Prices in the United States are expected to be about 10% to 20% higher than in Korea, reflecting local materials and supplies prices and labor costs.
Meanwhile, A TWOSOME's largest shareholder is the global private equity firm Carlyle. Carlyle acquired 100% equity in A TWOSOME in 2022 and now holds the entire stake through the special purpose company (SPC) Trinity Holdings.
A TWOSOME said this U.S. entry is not about boosting corporate value for Carlyle's investment recovery. Kim said, "With 1,750 stores in Korea and limited room for additional growth, we naturally began considering global expansion," and added, "If the U.S. business succeeds, it could help enhance corporate value, but that is not the purpose of this entry." Moon also said, "Entering the United States actually requires a lot of investment, making it difficult to raise corporate value in the short term," and added, "This is a decision made from a long-term perspective."