Friday 26th January 2018
|Text too small?|
Popular Wellington diner Five Boroughs has moved across town into smaller premises after the company was put into voluntary liquidation, which the owners say give it greater opportunity to chase more profitable business.
The company trading as Five Boroughs, which operated for three years on Majoribanks St in Mt Victoria, appointed liquidators on Jan. 8, but within a week the business had re-opened in the former Five & Dime site on upper Cuba St, an eatery also owned by directors Bryn Thomas and Elie Assaf, that had been open for about two years.
Thomas says the liquidation was "the quickest and cleanest" means to an end, and the pair had been looking to shift Five Boroughs' strategy away from the high-volume casual dining experience.
"What we wanted to do was to elevate the Five Boroughs brand, to elevate everything we were doing," Thomas said. "We could see ourselves on this slippery slope where we were basically just becoming a hamburger restaurant, and neither Elie nor myself really wanted that.
"It was more sensible for us to move it to a smaller site, where we could really get a handle on the product and the quality. It made sense to bring it into the city, where we can turn the Five Boroughs brand into something a bit slicker. We decided we'd get a handle on everything now and do it on our terms."
According to the first report from liquidator ShephardDunphy, Five Boroughs was under-capitalised from the outset, meaning the fit-out costs were paid from trading sales. The company, Glassescases, fell behind with Inland Revenue obligations and creditors, and "struggled to manage the rapid growth in sales and as a result gross profit was declining."
"We opened up with a huge bang, hit the ground running and the ground was moving a bit faster than we were in the first year," Thomas said. "We were basically playing catch-up from day one, chasing our tails.
"Our company grew from four employees when we opened the doors to 19. Including Five & Dime, we had upwards of 30 people working for us in the space of months. We weren't quite ready for that. The way I look at it is we had a practice run at opening our dream business, and now we get to do it all over again."
ShephardDunphy's report says the business had $143,000 in fixed assets, including leasehold improvements, but it's expected to realise $50,000 of that. It owes $32,400 to employees in holiday pay, $27,000 to unsecured trade creditors, and about $360,000 to Inland Revenue, though that number is yet to be confirmed.
Five & Dime, which is a separate business, gave the pair two years to test ideas, Thomas said. Now that Five Boroughs has moved into the smaller space - around one-third of the size of the large Mt Vic site - he anticipates the business will evolve to run a menu more like Five & Dime, which had a more gourmet, innovative menu compared to Five Borough's New York-styled burgers, fried chicken and fries.
"What people are probably going to see over the next six-to-12 months is Five Boroughs blending into Five & Dime more and more," Thomas says. "We're going to continue to use [Five & Dime] as our pop-up, colloquially we've been telling everyone it's going on the road. We've got a few pop-ups organised - one in Blenheim in March or April, and still in negotiations for a couple up in Auckland in the next few months. It gives us a nice outlet to continue the creative process for that business."
No comments yet
MARKET CLOSE: NZ shares gain as Trade Me hits record on takeover
NZ dollar higher against USD as jitters about China-US trade tensions recede
Rakon boosts bank funding to meet increased telco demand
Underfunded Overseer farm management tool needs thorough review: Upton
Motor vehicle lending helps UDC lift annual profit 6%
Orr says RBNZ still under-resourced, funding model part of second phase of review
Leading business brokerage firm LINK raises a further NZ$3.45m in capital
Travel insurance and the AirNZ strike
Industrial heat a challenge for cost-effective emissions reduction
Hallenstein Glasson wary of margin squeeze in second half