FILE PHOTO: A Vapiano restaurant, a German franchise restaurant offering Italian food is pictured in Stuttgart, Germany October 11, 2019. REUTERS/Wolfgang Rattay
FRANKFURT (Reuters) – German restaurant chain Vapiano SE (VAO.DE) on Friday said it had opened insolvency proceedings and would apply for government assistance programs to avoid bankruptcy, blaming the corona crisis for a further drop in sales.
Vapiano’s 55 German restaurants were closed yesterday evening, and almost all of the chain’s 230 outlets are now closed, the restaurant chain said in a regulatory statement.
“Due to the drastic decline in net sales and revenues, Vapiano is now in a state of insolvency, specifically a cash flow insolvency,” the restaurant chain said in a regulatory statement.
Under German insolvency law, management has three weeks to evaluate whether full insolvency proceedings can still be averted.
“Vapiano will apply at short notice for support under the financial assistance programs announced by various governments in Europe,” it said.
Vapiano said it will pursue insolvency if such efforts to secure financial support fail since it generates almost no turnover, while salaries, rents and operating costs continue to accrue. It expects a decline in sales of over 20%, and a fall in operating and net profit in the first and second quarters of 2020, it said.
Reporting by Edward Taylor, editing by Thomas Escritt