A Popular Asian Restaurant in Melbourne Goes Into Administration Amidst Struggles
Introduction
Calia, a popular Asian restaurant brand with two locations in Melbourne, has recently gone into administration, as revealed in an emotional post by one of its co-founders. The restaurant, which was launched in 2016, expanded to include a retail section offering high-quality food and alcohol products. However, despite its initial success, Calia has been unable to overcome the financial challenges presented by rising operational costs, leading to its current predicament. This report will delve into the details of the company’s struggles, examine the impact of COVID lockdowns on its business, and discuss the potential for a restructuring and revival.
The Rise and Fall of Calia
Calia, co-founded by Jason Chang and Ricky Thien, quickly gained popularity among food enthusiasts in Melbourne with its blend of fine dining and Asian cuisine. With two physical restaurant stores at Chadstone and the Emporium, accompanied by a retail section, the brand established itself as a go-to destination for culinary experiences. Moreover, Calia expanded its reach overseas, opening two stores in Kuala Lumpur and planning another one in Jakarta.
The Challenges Faced by Small Businesses
Co-founder Jason Chang took to social media to share the challenges he faced as a business owner in Melbourne amidst the cost-of-living crisis. He candidly expressed his own struggles with depression and anxiety, shedding light on the emotional toll of running a small business. Chang’s admission highlighted a pressing concern for many struggling small business owners, including those in the hospitality industry.
The Cost-of-Living Crisis
Chang mentioned the rise of operational costs, including wages, COGS (cost of goods sold), rent, and borrowing costs, as significant challenges for Calia. With Melbourne facing a cost-of-living crisis, small businesses continue to bear the brunt of increasing expenses. This crisis has been exacerbated by the economic downturn caused by the COVID-19 pandemic, making it even more difficult for businesses like Calia to remain financially viable.
The Impact of COVID Lockdowns
Like many other businesses in the hospitality industry, Calia experienced severe impacts from the COVID-19 lockdowns. The mandatory closures and restrictions on dining-in significantly affected the revenue streams of the two Melbourne restaurants. While trading has improved since lockdowns were lifted, Calia still finds itself burdened with a substantial backlog of debt, making it difficult to recover completely without restructuring its operations.
The Way Forward: Restructuring and Revival
To address its financial difficulties, Calia has entered administration, with Glenn Anthony Crisp from Jirsch Sutherland appointed as the joint administrator. The aim is to restructure the business and enter into a Deed of Company Arrangement (DOCA) with its creditors. If accepted, this arrangement would allow Calia to clear its debts and continue operations.
The Importance of Support
As co-founder Jason Chang emphasized in his social media post, it is crucial for struggling business owners to seek help and not be afraid to lean on others for support. The emotional stress of managing a business, especially during challenging times, can take a toll on mental health. Encouraging an open dialogue and providing resources for mental well-being are critical in fostering a supportive environment for business owners.
Conclusion
The struggles faced by Calia are not unique, as many small businesses in Melbourne and beyond continue to grapple with the cost-of-living crisis and the ripple effects of the COVID-19 pandemic. It is a stark reminder of the challenges inherent in the hospitality industry and the need for sustainable business models. However, with the possibility of a successful restructuring, there is hope that Calia will overcome its current financial difficulties and continue to offer its unique dining and retail experiences to the people of Melbourne and beyond. Moving forward, it is essential for policymakers and industry stakeholders to address the systemic issues that contribute to the difficulties faced by small businesses, ensuring the long-term viability of the culinary scene.
<< photo by Brooke Lark >>
The image is for illustrative purposes only and does not depict the actual situation.
