GRAND RAPIDS, Mich. (WOOD) — The financial fallout from the closures meant to slow the spread of COVID-19 continues to impact businesses. The latest to take action to mitigate months of lost revenue is Barfly Ventures.
The owner of HopCat, Stella’s Lounge and Grand Rapids Brewing Co. announced Wednesday it is filing for Chapter 11 bankruptcy protections. The move will allow the company to buy some time with creditors while it tries to recoup some of its losses. It is vowing to reopen its bars and restaurants.
“The COVID shutdown has been difficult for us, as it has been for the entire restaurant industry,” Barfly Ventures owner Mark Sellers told News 8.
Shut down since March 16, Barfly tried to rely on curbside service to keep the doors opened early on.
“Within a week, we realized we couldn’t make money or even break even doing that.” Sellers said.
He said the closures led to a 100% drop in revenue for nearly three months. All 16 locations owned by the company, including several out of state, were closed and employees were laid off.
“We have a lender and landlords that we haven’t been paying rent to the last couple of months because of the shutdown,” Sellers said.
He said increased competition and “craft beer saturation” added to the company’s challenges before the pandemic.
But Sellers says there is light at the end of the tunnel. He’ll be allowed to reopen Michigan locations Monday. Restaurants in Lincoln, Nebraska, and Indianapolis, Indiana, will reopen June 22.
Sellers says the bankruptcy filing should help in efforts to negotiate with creditors.
“Chapter 11 sounds like a failure. But it’s a new start for us, to be able to clean up our balance sheet and be able to get back to doing what we love at HopCat — and that’s serving great food and great beer,” Sellers said. “It won’t affect any of our stores. It won’t affect our employees. Just basically a financial restructuring.”
During the bankruptcy process, BarFly says it will continue to honor gift cards and rewards programs and pay employees and vendors “in a timely fashion.” Sellers also says most employees will be going back to work.
But your dining experience will be affected when restaurants reopen. Expect more curbside service, plenty of social distancing inside and outside the restaurants, along with masked and gloved servers following U.S. Centers for Disease Control and Prevention guidelines.
When it comes to menus, think scroll down and swipe right.
“You look on your phone for the menu instead of handing them a piece of paper that 20 other people have already touched,” Sellers said.
Patrons are also asked to wear masks when they’re not eating.
While he is optimistic about the future, Sellers said to expect more of the same from other bar and restaurant owners as they try to recover from financial impact of the coronavirus closures.
“We’re not actually the first, but we’re one of the first to do a Chapter 11 reorganization,” Sellers said. “But there’s going to be a wave of them.”
—News 8 digital reporter Christa Ferguson contributed to this report