Celebrity chef Mark McEwan’s restaurant, gourmet grocery and events business has received protection from creditors, warning that unless it is allowed to “rightly shape” its operations, it may run out of cash within weeks. could.
Toronto-based McEwan Enterprises Inc. It was already struggling before the COVID-19 pandemic, which resulted in a temporary closure and reduced traffic at its locations. According to court documents, the company has not been profitable since 2017. Like many in the hospitality industry, Mr McEwan’s catering business and high-end restaurants – including Baymark, Fabrica, One Restaurant and Dewan – have been hit hard by the pandemic. In addition to its six restaurants, McEwan Enterprises also operates two food halls and a gourmet grocery store, the meal-kit service Goodfood Market Corp. partner with, and Mr. McEwan’s television and media projects, such as Food Network shows. Top Chef Canada.
The company is seeking court approval to transfer business to a new company held by the same owners, except for the leases of the Fabrica Don Mills restaurant and McEwan Yong & Bloor Food Hall. A subsidiary of Fairfax Financial Holdings Limited holds 55 percent of the company, and the remainder is owned by McEwan Holdco Inc., the holding company of Mr. McEwan.
As of August 31, McEwan Enterprises had liabilities of $10.25 million, including $2.3 million owed to its suppliers, $2.3 million in loans from Fairfax, its largest shareholder, $2.2 million to Royal Bank of Canada, $2.3 million in overdue or deferred payments. 539,000 were included. $488,000 in rent to landlords, and outstanding customer gift cards.
As a result of the COVID pandemic, McEwan restaurants – most of which are located in Toronto – have been closed for a total of 10 of the past 18 months, and its food hall and grocery location have seen a significant reduction in customer traffic. for court documents.
But the most significant strain on the company’s finances has been its food hall Yong & Bloor, which opened in 2019. McEwan noted in an affidavit filed on September 27. The affidavit said that both the Fabrica restaurant location and the McEwan grocery location in Don Mills were also performing poorly even before the pandemic.
McEwan Enterprises lost $1.3-million in 2019 and $2.8-million in 2020. In the first six months of this year, it lost another $2.2-million.
The company has attempted to renegotiate some of its leases and move out of some of its locations, but has been unable to reach agreements with landlords, Mr McEwan’s affidavit said. It employs 213 full-time and 55 part-time employees, all of whom plan to follow up on transactions.
To cut costs, the company temporarily laid off 200 employees at its locations, of whom 173 have been rehired so far. It also negotiated rent deferrals and abatements, deferred equipment lease obligations, and applied for and received government support, including approximately $300,000 under the Canada Emergency Rent Subsidy (CERS), $3.3 million under the Canada Emergency Wage Subsidy (CEWS). did, which had a loan of $60,000. Canada Emergency Business Account (CEBA) and a $250,000 loan under the Business Development Canada program for areas affected by the pandemic.
In a court filing, the monitor overseeing the creditor-protection process noted that the company expects to run out of cash by the last week of October.
The company was granted protection under the Companies Creditor Arrangement Act (CCAA) on September 28.
“Many McEwan locations have historically been successful and profitable; However … some locations have been performing poorly for several years, putting significant pressure on the profitability and liquidity of the company as a whole,” Mr McEwan’s affidavit said.
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