2023-08-09 04:00:00
Suffocated by the weight of the debt accumulated in survival loans during the pandemic, the 10 Juliette & Chocolat restaurants declare bankruptcy. This situation might affect many other establishments, as the loan repayment deadline is approaching.
• Read also: Juliette & Chocolat: the 10 closed restaurants
“In the last year, just in interest, I repaid more than $1M. We can last a year like that, but for the year that was expected, it was going to be closer to $1.5M. I don’t have bottomless pockets,” regrets founder Juliette Brun, who started the business 20 years ago and who has to lay off some 350 employees.
Never before the pandemic had the entrepreneur borrowed, but the closures forced by sanitary measures caused sales to plummet, hence the need to obtain emergency loans from the federal government and the city of Montreal, notably. Some were compulsorily contracted at variable rates. With the rise in interest rates over the past year, combined with inflation, customers may have returned to the branch, but nothing was going well. Juliette Brun looked for solutions until the end, determined to repay her debts.
Juliette Brun would have liked to be able to renegotiate the terms of the repayment of the debt to save the company. Juliette&Chocolate
“Even if I closed some restaurants that were more difficult to operate, all the debt would fall on the most profitable ones and then they would no longer have been profitable. It was a puzzle with no solution,” said the one who would have liked to be able to negotiate an extension of the loan repayment period.
“The price of debt versus the price of a company closing, when it hired 350 people and generated $10 million in revenue and paid taxes… it hurts a country when you lose that,” muses. Juliette Brun, thinking of the possible addition of other similar bankruptcies.
Listen to the economic chronicle of Francis Gosselin, economist at the microphone of Jean-François Baril via QUB radio :
Extension of the reimbursement period requested
The Association des restaurateurs du Québec (ARQ) is also calling for the postponement of the loan repayment deadline to avoid losing too many businesses.
“There is stress for the deadline of December 31, 2023 and we have people who think they can’t get there,” observes Martin Vézina at ARQ public affairs.
Eligible businesses received between $40,000 and $60,000 in loans. In the restaurant industry, where profit margins are on average 4%, a business that has revenues of $1 million will only generate $40,000 in profits, so it is difficult to repay loans quickly.
“Our restaurateurs have also had to increase salaries and the cost of their groceries has also increased. As it is understaffed, opening hours are often reduced. So that reduces possible sales as well. It’s difficult,” says Mr. Vézina.
Determined to start once more
Juliette Brun assumes full responsibility for her bankruptcy, despite the uncontrollable events she faced.
“The hardest part is no longer working with my team, my Red Hats. It hurts, I let them down a bit. I didn’t really succeed in my contract with them,” she says, sad not to have been able to lead the boat to port.
Each employee in post for more than three months will receive 8 weeks of salary compensation.
Juliette Brun still has her recipes and the desire to start from scratch. Juliette&Chocolate
Even if she loses premises and equipment, Juliette Brun is determined to bounce back.
“I know you’ll have to start from scratch, but I’m not one to give up easily. It’s important not to get discouraged. I have five children and I have a duty to show them what resilience is,” she confides.
The online store will have to close temporarily, but the Juliette & Chocolat brand still belongs to Juliette Brun, like her recipes, and already, employees are raising their hands to continue, once everything is settled with the bankruptcy trustee.
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