Long before a virus called sars-cov-2 brought public life to a standstill, things were far from rosy for vapiano: the restaurant chain had to report heavy losses, and even a slimmed-down menu card or new ordering terminals did not bring the hoped-for turnaround.
Now that pizza and pasta in restaurants is no longer an issue because the risk of infection is too high, vapiano has therefore been hit very quickly: in germany, 55 restaurants have been forced to close indefinitely, worldwide even more than 230. Since sales are not coming in and the rent and the keeper still have to be paid, vapiano had to announce on friday: the cash box is empty, we are unable to pay.
In normal times, the listed company now had to file for formal insolvency within three weeks. In the corona reality, however, vapiano hopes to be able to pull its head out of the noose. At the beginning of the week, the cologne-based company announced its intention to apply for help from the state.
A few days later, it was announced that applications would be made for assistance programs from various governments in europe. "As of today, it is clear that without immediate government support, vapiano will not be able to survive and will have to file for bankruptcy, resulting in the loss of 10,000 jobs worldwide," said vapiano CEO vanessa hall on friday. About 3800 of these jobs have been eliminated in germany. Only if fast and sufficient support came from the state, an already developed financing solution with the substantial shareholders and the financing banks could also succeed.
Despite determined announcements by politicians, it has not even been possible to submit a corresponding application for state aid, the company complained. The "k-corona aid" to bridge liquidity bottlenecks is "apparently not available at this time". Vapiano is not alone in this criticism: "it’s not enough to put high state subsidies in the shop window," complained rainer kirchdorfer, chairman of the family business foundation. "This can only be done with lump-sum approvals in a fast-track procedure."
The federal government has decided on an unlimited credit program to ensure the liquidity of companies in view of the dramatic economic consequences of the corona crisis. The state-owned forderbank k offers to assume 70 to 80 percent of the credit risk for the commercial banks, depending on the program. This should make it easier for the financial institutions to grant loans.
Justice minister christine lambrecht (SPD) also announced her intention to suspend the obligation to file for insolvency. "We want to prevent companies from having to file for bankruptcy simply because the aid decided on by the federal government does not reach them in time," says lambrecht. Vapiano could now become the precedent.
For vapiano, the corona-related standstill is only the stumbling block that could bring down a fragile house of cards of financing. The chain has been in the red for a long time now. In the first three quarters of 2019, germany’s only listed restaurant chain already reported a loss of 46.1 million euros, significantly more than a year earlier (minus 29.4 million euros).
For years, the chain’s business flourished, but as it expanded, the company overreached itself. Many new restaurants have become loss-makers. In addition, competitors such as L’osteria have become stronger – this chain relies on table service, whereas at vapiano, guests have to order and collect their food themselves at the counter. At L’osteria, the company is still putting up a fight: "we’re sticking it out," CEO mirko silz told "wirtschaftswoche". "But the market will certainly look different after corona than before."