The Rise, Decline and Section 363 Sale of the New York Coffee Chain Fika

Fika coffee new york

“Though the word “fika” famously refers to the Swedish cultural practice of slowing down to relax with those around you over coffee or tea and a small bite, the New York City coffee chain Fika has been operating at a breakneck pace in recent years.

By 2016, ten years after opening Fika with a single Manhattan location, founder Lars Akerlund had led the boutique coffee chain to 17 locations while signaling the company’s intentions to expand its physical footprint into more U.S. cities and countries overseas. Two years after that, by Sept. 2018, Fika had filed for Chapter 11 bankruptcy.

Today, the company is down to six New York locations, and it has recently been acquired through an auction process under the U.S. Bankruptcy Code, section 363, according to an announcement made by Cozen O’Connor, a law firm involved with the acquisition process.

“The expansion required significant start-up costs for each of the locations before they could become profitable,” the firm said, noting the rapid addition of 12 Fika cafes that began in 2013. “FIKA was subsequently unable to secure additional investors to cover the expansion costs and its operations alone could not absorb the increased start-up expenses. The legacy costs from the aggressive expansion forced FIKA, therefore, to close a number of locations and return to a streamlined, conservative business model centered on fewer stores.”

Read more here.

U.S. FDA Says It Will Try to Resume Some Food Inspections

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“The U.S. Food and Drug Administration will be restarting high-risk food inspections as early as Tuesday — a process many Americans may not have even known was halted.

FDA Commissioner Scott Gottlieb announced via Twitter the plan to resume high-risk probes on Monday afternoon, adding that “we started sampling high-risk imported produce in the northeast region today. We’ll expand our footprint as the week progresses. Our teams are working.”

The work is “being done by an inspectorate that’s largely going unpaid,” during the government shutdown, he added.”

See more here.

UNFI completes SUPERVALU acquisition

Image result for unfi“United Natural Foods Inc. closed its $2.9 billion purchase of Supervalu Inc. on Monday, with Supervalu shares disappearing from the New York Stock Exchange as the first sign of the completed takeover.

In coming months, United Natural aims to sell Supervalu’s grocery store chains, including Cub Foods, and narrow its business to wholesale distribution similar to its own.

United Natural Foods (UNFI), based in Providence, R.I., is the nation’s largest distributor of organic and natural foods. With Supervalu, the company will more than double its size and expand its reach into traditional foods and grocery stores.

View more here.

Manhattan Food and Bar Leasing Up Double Digits

Across the city, landlords want a seat at the table.  More specifically, they want the seats, and they want the tables inside their buildings.  Fast-casual restaurants, coffee shops, and juice bars are expanding across Manhattan, driven in part by a large millennial workforce and dense, wealthy demographic.

Also, though, as consumers behaviors have changed, opportunity has opened up for foodservice operators.  More and more retail and apparel is being purchased online, which has caused these companies to trim store sizes.  Now, with new inventory available, restaurants are building new locations even faster.  In 2015, the fast-casual segment grew to $44 billion nationwide–an 11.5% increase from 2014, according to Technomic.

Similarly, Manhattan lease transactions in the food and bar category increased 22% in 2015 over 2014, Cushman & Wakefield reports.  Meanwhile, drugstore leases were down 64% and apparel and accessories retails were down 22%.

Where banks and retailers once occupied large-footprint spaces, some landlords are building out food halls or dividing spaces into smaller units.  “You’re getting more [rent] than what a single tenant would pay,” said Brett Herschenfeld, SL Green Managing Director.

To read more, click here.

 

Bringing Concepts to New York City

It’s not news that the New York City hospitality industry is unlike any other in the world. With over 40,000 restaurants, New York is a mecca for foodservice. While this presents a great opportunity for operators from elsewhere, it is also not to be taken lightly—the NYC market is competitive and volatile. As advisors, it is our responsibility to ensure your success. The following is a brief overview of the work we do to achieve that:

Fully Understand the Concept
This means going to the source. As advisors, it’s of utmost importance that we really comprehend the entire experience—from product, to packaging, to interior design, to the location, to the culture. We need to understand what makes your business work where it is in order to properly plan out how it will succeed in New York City. Whether you operate in San Francisco or Sao Paulo, we will come to you to do our due diligence. Last month we were in Mexico City! (Stay tuned for more details!)

Refine the Concept
Next, we identify where your concept fits in the current landscape—is it entirely new, or is there already direct competition? Based on this, we begin to refine the concept accordingly. Any adjustments we suggest are driven by what will generate revenue. We want to maintain the authenticity and soul of the enterprise but ensure that it resonates with the NYC market.

In the same vein, we want the concept to appeal to a similar demographic. New York City is not one large homogeneous pot; it is a stew of different neighborhoods with different characteristics. As such, a high-volume, fine-dining concept from Japan that is frequented by businesspeople with high disposable incomes won’t fare well in Red Hook. We’re going to make sure you open in the right place.

Plan Accordingly
Once we’ve defined the concept for New York, we can honestly develop a business plan. Now, we can put the vision on paper and tie it to financials and a timeline.

Capital and operating budgets come from cold, hard data. We analyze your menu, equipment needs, labor scheduling, sales mix, floor plan, goals and vision, like concepts, menu pricing, average check, traffic counts, and market rents to flesh out a realistic budget. A steakhouse requires drastically different equipment and seating types than a coffee shop.

New York City is known for moving quickly—but that’s not actually case with restaurant development. Finding the right space, getting Department of Buildings approval, getting ConsolidatedEdison to turn on your gas, getting a certificate of occupancy, sourcing the right ingredients and finding the right team, and getting a cooperative’s board to approve plans are just a few of the items that can dramatically slow down the pace of a project. We’re going to make sure you open on time and on budget.

No matter where you’re from or what your model, we’re ready to bring it to life in New York City. Our town is booming with opportunity for those properly prepared—we’re here to shepherd you to success.

Openings: Dominique Ansel Kitchen

Screen Shot 2015-04-28 at 11.23.31 AMTomorrow, the much-anticipated Dominique Ansel Kitchen will open its doors to the West Village. The Cronut king has taken the industry by storm developing hybrid desserts and he plans to take things to the next level with his newest endeavor. Dominique Ansel Kitchen will be the first of its kind bringing bakery retail together with restaurant service. According to their newly launched website 70% of the menu will be made to order.

Dominique Ansel names time as an ingredient, placing importance on the care and process that goes into each pastry. The bakery vows to offer the “best and most genuine versions of pastries…at the perfect time for you to eat it”. Menu speculation includes chocolate mousse, baba au rhum, beignets, mille-feuille and very buttery lemon tarts that are all prepared a la minute with a one to two minute prep time. Additionally, the bakery will offer savory options including garlic bread croissants and béchamel filled squid ink toasts.

Ansel announced earlier this month that 26-year-old Karys Logue would be his Executive Chef overseeing both Dominique Ansel Kitchen as well as the original Dominique Ansel Bakery. Logue first crossed paths with Ansel when they worked together at Daniel and since she has perfected her skills as sous chef at Café Boulud as well as executive pastry chef at Sepia and Tessa.

Dominique Ansel Kitchen, 137 Seventh Avenue South (10th Street), 212-242-5111, dominiqueanselkitchen.com

Shake Shack Expanding In Japan

Shake Shack raised $105 million in its initial public offering last month and now plans to push the expansion overseas. Shake Shack’s largest presence is in New York with fifteen shops, but also has other shops within the US and a few overseas including London, Istanbul, Moscow and Dubai. The burger chain plans to open ten more and grow to roughly 450 shops.

Shake Shack signed a licensing agreement with a Japanese company, Sazaby League Ltd., which has opened Starbucks coffee shops in Japan in the past. The goal will be to open ten Shake Shack shops in Japan by 2020. A Tokyo restaurant is expected by next year. The Japanese Shake Shack restaurants will have the same Shake Shack menus with the same burgers, shakes and crinkly fries and their infamous frozen custards. For more information on Shake Shack’s expansion overseas in Japan, click here.