This popular cafe has now filed and unexpected Chapter 11 bankruptcy in Boston caused by the covid pandemic.
This restaurant is Milk Cafe, which has been a long time Boston favorite.
Milk Street Cafe has been a massive part of Boston’s busy restaurant scene that has grown from a cafe to a catering company that has served area businesses.
“We’re a family-owned and operated business and feel honored to call Boston our home. Milk Street is an upscale casual restaurant and one of the premier corporate caterers in Boston. We’re known for our commitment to beautifully prepared, delicious, healthy and wholesome foods,” the company shared.
Milk Street was ahead of its competition when it came to offering options for people who wanted a choice of Vegan, Gluten-free, or other special diet menus.
The cafe also went as far to offer a Kosher menu, a rarity in Boston, according to Universal Hub.
Milk Cafe started to see loses due to the global pandemic.
The Covid pandemic changed how many people work and commute.
Some companies gave up their offices, while others have moved to work hybrid schedules.
In many cases, businesses that would not hire remote workers have become open to it, and altogether these changes mean that fewer people are downtown.
This of course has meant that businesses like Milk Cafe, will have less customers making it much more difficult to make ends meet.
Many restaurant owners had based their locations downtown based on the office lunch rush.
The pandemic halted these lunch hours as many offices shifted to working from home or a hybrid schedule causing Milk Cafe to take even more losses.
In its bankruptcy filing, Milk Street Cafe reports that it has between 50 and 99 creditors.
It also shared that it has between $1 million and $10 million in assets and debts.
The cafe’s biggest creditors are its bank, Citizen’s Bank, which it owes $1.6 million, and its landlord, which is owed over $1.1 million, reports The Street.
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An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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