Vapiano, one of the largest German restaurant chains has opened insolvency proceedings on Friday. The listed group which had to close last week nearly all of their 230 restaurants in 33 countries on 5 continents due to the Coronavirus outbreak has urged the government for providing financial aids.
“Vapiano SE makes an urgent appeal to German politicians and urges them to implement the announced fast and unbureaucratic help and support programs for companies that are particularly affected by the economic consequences of COVID-19. Due to the drastic decline in sales and income in connection with the COVID-19 crisis, Vapiano SE has become insolvent as of today,” the company said in a press statement on Friday.
Vanessa Hall, CEO of Vapiano SE, added: "[German] Minister of the Economy Peter Altmaier promised earlier this week that no job should be lost due to COVID-19. We welcome this determined stance, but if we do not soon see an unbureaucratic and quick help for the affected companies, the loss of jobs will no longer be an abstract risk, but will inevitably become reality. As of today, it is clear that Vapiano will not be able to survive without immediate government support and will have to file for bankruptcy, which would result in the loss of 10,000 jobs worldwide."
Vapiano has been in crisis for some time. Since its IPO in 2017, Vapiano has "focused on very fast expansion and new openings", according to its former CEO Cornelius Everke, who resigned in August last year after only 9 months in the job.
Falling sales and deep negative results characterize the development of the former shooting star of the catering industry - and this in times of sustained high growth rates in out-of-home consumption. In 2018, the Cologne-based company had to report a loss of over 100 million euros with sales of 372 million euros. Last year was even worse mainly due to high depreciation and operating costs as a result of a misguided expansion strategy.
The Vapiano share price reflected the bad performance. At the IPO in June 2017, the paper traded at 23 euros. About one year later it became clear that the promises could not be fulfilled and the share price dropped within two months to about 7 euros. From there the share price never recovered until today when the price crashed to below one euro.