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Chocolate Brown, the business behind the Warkworth café and award-winning chocolaterie, and Bayside Restaurant at Snells Beach, has been placed in voluntary administration.
While the café and chocolate shop remain open, Bayside closed its doors on December 4.
Owner Susan Vize says multiple Covid lockdowns and mandate rules had worn the business down to the point where she could no longer borrow money to keep the enterprise afloat.
Bryan Williams, of BWA Insolvency, was appointed administrator on December 1 to “preserve the inherent value of the business and to see if it can be carried on with a sale to a new owner”.
“We owe a lot of money and the only way we are going to be able to pay back that money is to sell the business, so we are very committed to selling,” Vize says.
“We are being allowed to trade for a short time to realise a sale. It’s brutal.”
Vize bought the business in 2015 and has played an active role in the Warkworth business community since moving here with husband Des.
As well as the Mill Lane chocolate shop and cafe, the couple ran the café in the Oaks Retirement Village, before branching out to Bayside.
“As soon as the walls went up to restore the Warkworth Hotel [next door to the Oaks café], people just stopped seeing us and they stopped coming in, so we took our chef and our staff, and opened Bayside two years ago.
“All through Covid we retained staff and did everything we could to keep the business ticking over. We served coffee from the café doorway, did special donut days and delivered meals. We got the wage subsidy and some rent relief, but as soon as we came out of the red setting, our rent went back up but our revenue didn’t.
“Essentially, we went through five lockdowns in everything but name.
“When Siouxsie Wiles announced on January 15 that, ‘We’re not doing a lockdown, but Omicron is here so don’t go out to cafes or restaurants’, our revenue crashed. It went through the floor.”
Vize says on some days they made as little as $150.
“I’m not blaming Siouxsie Wiles, but Auckland had five lockdowns, and the rest of the country really doesn’t understand what that has meant. I do think the government could have done more, particularly for the hospitality sector. For instance, in the UK they supported cafes and restaurants with dining out vouchers.”
Café staff also bore the brunt of abuse from people who did not want to comply with the mandate rules.
“We weren’t setting the rules, but if we didn’t follow them there were substantial fines. The fact that not everyone did follow the rules made us look like we were discriminating, but all we were doing was trying to operate legally.”
And like many other hospitality businesses, staff shortages and turnover was an issue.
“We didn’t lose a lot of staff during Covid, but we were employing a lot of people who were on temporary work visas. We supported their residency applications but, of course, when they got them, they were free to work wherever they wanted and several left. Because they hadn’t been anywhere because of Covid, their holiday pay was enormous. We’re talking six employees, at $10,000 each. I just didn’t have that sort of money sitting in the bank. I’ve heard of a number of other businesses who were caught the same way.”
Vize says that with hindsight, she would have appointed an external director earlier to manage the business more closely so it didn’t end up in the position it is now.
“But you keep hoping. You keep hoping it will get better.”
The final straw was not being able to cover the purchase of chocolate for the Christmas rush.
“We have to start buying tens of thousands of dollars’ worth of chocolate in August and our bank knows this. But this year, the cafés couldn’t fund that outlay. The money for the chocolate doesn’t start coming in until around December 20, and it’s good money, but we needed to fund it in the interim and we just couldn’t do it this year. We just had no more money left, no more people to ask and the bank just wasn’t listening.”
Vize says she has been buoyed by the supportive messages she has received, some bringing her to tears.
“Overall, people – both customers and other business owners – have been very supportive, offering help where or if they can.
“I have no idea what Des and I will do after this, but I’ve only had one week off in the past three years and at present, I’m working 15-hour days, so when this is all over I’ll just need to take some time off before I look for a job.”
In a statement, the administrator said restructuring would happen immediately which would include stopping loss-making activity and redundancies for about one-third of the 30 staff.
