The restaurant and coffee shop division of RTC, a groupcontrolled by Octavian Radu, which operates a Vapiano restaurantand nine Cup&Cino coffee shops, already has three worst casescenarios for the next 12 months - any day it can lose more thanhalf of his restaurants, the bank's financial support and even thefranchise contracts.
"We are facing a collapse unless something happens soon.Revenues are five times lower than original forecasts amid atwo-fold decline in spending. Lately this has been borne by thegroup, but things are not very rosy for anyone at present. Thissupport does not mean a relaunch for us, it means survival, but itcould seriously affect the other divisions' business," AndreiArghirescu, vice-president of Rafar, the hospitality division ofthe RTC Group, which includes the Vapiano and Cup&Cino brands,told ZF.
In addition to the hospitality division (coffee shops andrestaurants), Rafar also includes 14 fashion brands, the mostfamous of which is Debenhams.
Arghirescu, 28, who took over as vice-president of thehospitality division a month ago, admits November will be the lastmonth when the division receives support from the group. The newexecutive of the group headed by Octavian Radu has a short-termplan - analysing all the basic facilities and then going to thepartners with the results. He intends to ask banks for a graceperiod "in order to survive over the next 12 months," eithernon-fixed rent calculated as a percentage of the revenues to retailspace owners or 30-40% lower rent compared with the amountinitially agreed on, and more flexibility from franchisers.
"We want to pursue our commitments to franchisers, the bank, andto customers. We are seeking opportunities, want to pursue ahealthy business model as far as organic growth is concerned. Wewill present our plan to the shareholder, the bank and thefranchiser, and, if we get support, we will be able to carry on, ifnot, we are in danger," believes the vice-president of RTC'shospitality division.
The company currently operates a Vapiano restaurant inBucharest's Anchor Plaza office building and nine Cup&Cinocoffee shops, most of which are integrated within Diverta bookshopsand Debenhams stores.
The restaurant and most coffee shops are however only in theirfirst year on the Romanian market, and operate on a segmentaffected by the decline in purchasing power. On the coffee shopmarket even big names such as Starbucks decided to close coffeeshops this year.
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