‘The numbers don’t lie:’ Restaurant owners feel toll over coronavirus closures
Restaurants learn to ‘pivot’ to survive during COVID-19 outbreak
Michael Raviele agonized for hours over how to break the news to his loyal customers before finally announcing at 4:30 a.m. on May 15 that he was closing Il Gatto Nero, the Italian restaurant his father first opened some six decades prior.
“I did that road for 18 years — up and down, every single day,” said the man with a tattoo of the restaurant’s logo on his arm. “I worked there every single day.”
Restaurants across Canada — from local institutions to newer spots hustling to establish themselves — have closed permanently in recent weeks as the COVID-19 pandemic ravaged an industry already plagued by razor-thin margins. Their owners face not only the emotional loss of their business, but also often large debt, little savings and an uncertain future.
Il Gatto Nero started as an Italian social club featuring pool tables and espresso more than 60 years ago. Raviele joined the business in the early 90s and slowly added to the club’s repertoire with a pizza oven, sandwiches and other tweaks.
The club moved to Toronto’s College Street about 18 years ago. At the new location, they saw a lot of success — like when Italy won the FIFA World Cup in 2006 — as well as some down times — like the 2008 recession — that prompted Raviele and his father to dip into personal savings to keep the restaurant afloat. Raviele invested more money into the business in 2014 for a renovation and expanded to a second location, a small cafe in Etobicoke, in October 2019.
When COVID-19 hit and government ordered dining rooms to close, Raviele attempted to shift to take away, but eventually stopped. Bills piled up from utility companies.
“I obviously incurred some debt and debt that wasn’t there,” he said.
But uncertainty over the future of dining was the final nail in Il Gatto Nero’s coffin.
Raviele speculated he might be required to remove the restaurant’s 10 bar seats and slash his 65-seat capacity in half to comply with pending physical distancing rules, which would cripple his business.
“I don’t see a future for my business or for my family,” he said. “The model for opening any restaurant is based on feeding capacity versus space, and how many people can you do over the course of a night… I mean, if you have one bad weekend, it could be disastrous for many small business.”
He plans to focus on the small espresso bar, add a pizza oven and hustle to keep that business going, which he said he invested his second life into.
“I’m angry because I wanted to do something good and now the possibility of losing both is always there.”
Mohammed Bin Yahya, co-founder and chief executive at Plentea, found the coronavirus to be “just like the knock out punch” for his Toronto tea bar.
Before the pandemic, the company was struggling to pay some $5,000 in rent. When they shifted to takeaway to abide by health regulations amid the pandemic, foot traffic dropped dramatically.
The tea shop, which Bin Yahya opened in 2015 with dreams of growing to multiple locations, will close at the end of the month.
“The numbers. Straight up, the numbers don’t lie,” he said.
The company had to pay penalties when closing some of their accounts with cleaning companies, internet and phone providers, and others, he said.
“We are in debt,” he said, estimating they’ll owe some $40,000 in the end.
For now, he’s trying to minimize his expenses, and said he may have to find a side job and move in with family to help pay back the loans.
But he’s keeping the dream alive. Plentea will continue selling tea online, he said, and — for now — he’ll keep the equipment in storage with the hopes of opening again.
With nearly four decades in the food industry, 77-year-old Frances Wood’s retirement plan relied heavily on the Cajun-and-Creole food restaurant she co-owns, Southern Accent in Toronto.
After 34 years in one location, Wood dipped into her nest egg to help cover a move to a new spot about three years ago. It took some time to build up a new customer base and Wood noticed in recent years, lucky restaurants made 10 per cent in profit.
Still, at the start of this year, she started seeing “the light at the end of the tunnel” in making the new location work.
She debated selling the restaurant after her five-year lease ended. But with about one-and-a-half years to go, COVID-19 hit.
Southern Accent also attempted take-away and delivery, but found with high delivery app fees, it was losing money each day it stayed open.
Wood and her co-owner decided to close permanently in April and have about $60,000 in loans and bills to pay back between them.
In what Wood called “a miracle,” their landlord released them from their roughly $10,000 monthly lease early, Wood said.
“I don’t know what we would have done. We would have to go personally bankrupt, I guess” had that not happened, she said.
The next phase of the septuagenarian’s life “doesn’t look very good.” Wood didn’t draw a salary for the past several years, but the restaurant did pay some of her expenses. She collects Old Age Security, the Canada Pension Plan and has some personal savings, but that hardly covers her monthly expenses.
“My livelihood, what I was expecting to have at the end of 37 years in the restaurant business was some money from the restaurant when I sold it to help with my senior years.”
She planned to sell the name and recipes, and help set the buyer up for success. She even kept the restaurant’s 1940s bar in case a buyer emerges. It’s tucked away in the garage.
Still, she considers herself lucky all things considered.
“I think, ‘Okay, I’m lucky. I have my health.”’