QSR Media Exclusive: A Look At MissChu's Administration Proceedings
Administrator Rahul Goyal reveals how the sale deliberations are going and a new strategy to lower fixed costs.
When the debt-ridden Vietnamese tuckshop and catering brand MissChu entered into administration in late December, voluntary administrators Rahul Goyal and Janna Robertson of KordaMentha Restructuring took full control of MissChu's NSW operations and had to come up with a plan to court new backers and rein in fixed costs.
A month later, Goyal reports to QSR Media that the administration is going well: There have been 54 enquiries, resulting in 12 interested parties undertaking due diligence, including Nahji Chu herself. The deadline for offers is 27 January. Interested parties have ranged from private equity firms to trade purchase operators.
Goyal and his partner will then spend a couple of weeks to decide on the successful applicant. They expect to have a short list of preferred parties by the first or second week of February, and maybe even complete the sale next month but it will depend on the conditions of purchase.
Mr Goyal said : “The level of interest shows the strength of the Miss Chu brand and an understanding of the underlying business model.”
One of the major problems for the business was its high fixed costs . To lower this, Goyal says that wages were reduced by approximately $50,000 per week which translates to $2.5 million in annual savings. The administrators has also put in place better ordering and cost control processes with a focus on reducing the cost of goods sold and labour costs.
Goyal notes that the business is trading well. MissChu was the restaurant partner for Flickerfest last week and is also the caterer for the Career Trackers Indigenous Gala Dinner being held next week. This catering event will feed 1,300 people and includes leaders of Australia’s top companies. The Administrators are also using social media and print media to remind customers that MissChu has not closed down.
Goyal also notes that cash flow issues continue to be addressed. All suppliers continue to trade with MissChu, and they are being paid on time every Wednesday. Wages and rents are similarly settled on time, with employees and landlords being paid fortnightly.
The two Miss Chu stores in Melbourne and the London store are not subject to this administration.
