RTC owner could give up restaurant and coffee shops

The restaurant and coffee shop division of RTC, a group controlled by Octavian Radu, which operates a Vapiano restaurant and nine Cup&Cino coffee shops, already has three worst case scenarios for the next 12 months - any day it can lose more than half of his restaurants, the bank's financial support and even the franchise contracts.

"We are facing a collapse unless something happens soon. Revenues are five times lower than original forecasts amid a two-fold decline in spending. Lately this has been borne by the group, but things are not very rosy for anyone at present. This support does not mean a relaunch for us, it means survival, but it could seriously affect the other divisions' business," Andrei Arghirescu, vice-president of Rafar, the hospitality division of the RTC Group, which includes the Vapiano and Cup&Cino brands, told ZF.

In addition to the hospitality division (coffee shops and restaurants), Rafar also includes 14 fashion brands, the most famous of which is Debenhams.

Arghirescu, 28, who took over as vice-president of the hospitality division a month ago, admits November will be the last month when the division receives support from the group. The new executive of the group headed by Octavian Radu has a short-term plan - analysing all the basic facilities and then going to the partners with the results. He intends to ask banks for a grace period "in order to survive over the next 12 months," either non-fixed rent calculated as a percentage of the revenues to retail space owners or 30-40% lower rent compared with the amount initially agreed on, and more flexibility from franchisers.

"We want to pursue our commitments to franchisers, the bank, and to customers. We are seeking opportunities, want to pursue a healthy business model as far as organic growth is concerned. We will present our plan to the shareholder, the bank and the franchiser, and, if we get support, we will be able to carry on, if not, we are in danger," believes the vice-president of RTC's hospitality division.

The company currently operates a Vapiano restaurant in Bucharest's Anchor Plaza office building and nine Cup&Cino coffee shops, most of which are integrated within Diverta bookshops and Debenhams stores.

The restaurant and most coffee shops are however only in their first year on the Romanian market, and operate on a segment affected by the decline in purchasing power. On the coffee shop market even big names such as Starbucks decided to close coffee shops this year.