Speciality restaurants to remain shuttered till March 31

Abhishek Law Kolkata | Updated on March 20, 2020

It’s too early to determine financial impact of closure, says company’s CMD

Speciality Restaurants, which own brands like Mainland China, Oh! Calcutta, Cafe Mezunna and Hoppipola, has suspended operations till March 31 in view of the coronavirus outbreak.

The country’s largest listed restaurant chain will review the situation on March 31, before taking a call on re-opening outlets. The temporary suspension of operations came into effect from March 18.

Anjan Chatterjee, Chairman and Managing Director, Speciality Restaurants, said the decision has been taken keeping in view the emerging health situation and the threats posed to public safety due to the coronavirus outbreak.

“At any given point of time, there are 20 per cent expats at any of our restaurants. Most people who visit the outlets have history of foreign travel. Moreover, we employ a large number of staff. In this context, and keeping in mind public safety, we decided to suspend operations till March 31,” he told BusinessLine.

Speciality Restaurants had introduced preventive measures like thermal scanning of guests before entry, mandatory usage of hand sanitisers and sanitisation of premises. However, the threat perception is far higher, the CMD maintained.

“We will hold a review meeting on March 31 and take a call depending on the situation. We have formed an internal committee to look into these issues,” said Chatterjee.

Speciality Restaurants employs around 5,000 people across all 128 outlets (as on March 31, 2019). And most of these employees have been asked to go on ‘paid leaves’. For some, there will be loss of pay, though. “Most employees have pending holidays and leaves which we are asking them to utilise at the moment,” he added.

Kitchen services, catering to food delivery aggregators, remain functional but only across select locations and specific areas.

Impact on performance

Chatterjee says it is difficult to determine the financial implications of the shutdown. “It is too early,” he said, adding that the entire restaurant industry is expected to see a slowdown and take hits in view of the coronavirus outbreak. Incidentally, Speciality Restaurants’ performance had shown an improvement in FY19 vis-a-vis FY18.

The company’s annual report maintains that consolidated revenue from operations stood at ₹346 crore last fiscal with losses falling to about ₹7 crore in FY19 as against ₹297 crore and ₹25 crore respectively.

EBITDA (earnings before interest, taxation, depreciation and amortization) margins too had seen an improvement of 170 basis points to 6.6 per cent.

Published on March 20, 2020

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