Restaurants on slippery path

Amid the sudden and controversial closure of three local restaurants, a veteran in the industry says the current business climate could leave his establishment in a similar position if resources are not managed with caution.

Kenneth Evelyn, the owner of Naru Restaurant and Lounge at Hastings and Miso by Naru at Coverley, Christ Church says a sharp decrease in client spend since the 2017/2018 tourist season has often left his restaurants operating in the red.

He was responding to the recent closure of Chaps Restaurants Limited which left 149 employees on the breadline when it closed the doors of Cin Cin by the Sea, Hugo’s Barbados and Primo Bar and Bistro. The measure was taken without prior notice to staff with top management citing a falloff in visitor spend and unfair taxation policies as the main reasons for its closure.

But while some have accused Chaps’ Chief Executive Officer (CEO) Joanne Pooler of withholding the “real” reasons for the company’s decision, Evelyn who has 50 years in the business says the local climate has not been favourable to stand-alone restaurants.

“A lot of people believe the restaurant business has a lot of money and a lot of profits in it, but with the exception of a few top-class restaurants and a few from previous eras that have since closed down you realise that we don’t get the types of sales and the types of spend that they get,” Evelyn told Barbados TODAY.

“I’ve seen it from all angles and it is not easy. You have to be at the top of your game every single day of your life. If you’re not on top of it, exactly what happened to them will happen to me,” he added.

According to Evelyn, times are so tough that his company has been forced to negotiate a “slight” reduction in rent, while cutting back on utility costs and human resources, particularly in the low season.

His perspective offers a sharp contrast to that of Chiryl Newman, the owner of Champers, a high-end South Coast restaurant. On Monday, she suggested that the situation is not as dire as Chaps has claimed.

“There must have been other factors at play that would have brought him to that point because you can’t just wake up one morning and decide you are going to close the business…There is business out there on the south coast. I can’t say that everybody is doing brilliantly and bursting at the doors but there is business out there,” Newman said on Down to Brass Tacks.

“In the U.K and the U.S, you have VAT at 22 per cent and he [the owner of Chaps] would have been at a reduced rate of ten per cent along with the product levy at 2.5 per cent. Now this year with the reduced corporation tax, his tax level would have been reduced to five per cent. So you have to ask what else is going on in those businesses,” she argued.

The owner of Naru, on the other hand, contends that the number of “heads” at a restaurant on any given night, is no guarantee of profits.

“The last time we saw a good spend with the number of heads would have been around 2017/2018 when we had a pretty fantastic year. Since then we have seen a massive decline in the spend,” Evelyn disclosed.

“The summer months are so bad that when the busy period comes around and you do clear off some debts, you’re back into the red again. It is something I believe the government will have to look at when it comes to these duty-free concessions which allow hotels and hotel restaurants to lower their prices.

“It’s a big burden on us as well and I don’t know how much longer we can bear it. The Government said they would look at stand-alone restaurants and we haven’t seen anything, so I don’t know where they stand today,” he told Barbados TODAY.

Given his location on the South Coast, the veteran businessman added that the burden of declining sales has been exacerbated by more than $500,000 in losses because of the south coast sewage crisis.

“We were hoping for good seasons to recover it faster, but we haven’t seen that. We were trying to get compensation but they wouldn’t even entertain it… and when the dirty water came off of the streets that discussion died a natural death as things usually happen in Barbados,” he added.

Evelyn started with a restaurant on Broad Street in 1970 and moved to various hotels before establishing Naru where he employs 22 staff. But he has not stopped there recently placing his capital behind Miso by Naru at Coverley with 14 workers which he says has been doing reasonably well.

“You can’t just sit down on your laurels and do nothing. You have to work on this on a daily basis. As a manager/owner/investor, you have to know where you are going on a daily basis because a restaurant can shut you down in a month,” he said.

kareemsmith@barbadostoday.bb