Michael Raviele agonized for hours over how to break the news to his loyal customers before finally announcing at 4:30 a.m. ET on May 15 that he was closing Il Gatto Nero, the Toronto Italian restaurant his father first opened some six decades earlier.
“I did that road for 18 years — up and down, every single day,” said the man with a tattoo of the restaurant’s logo on his arm. “I worked there every single day.”
Restaurants across Canada — from local institutions to newer spots hustling to establish themselves — have closed permanently in recent weeks as the COVID-19 pandemic ravaged an industry already plagued by razor-thin margins. Their owners face not only the emotional loss of their business, but also often large debt, little savings and an uncertain future.
Il Gatto Nero started as an Italian social club featuring pool tables and espresso more than 60 years ago. Raviele joined the business in the early 90s and slowly added to the club’s repertoire with a pizza oven, sandwiches and other tweaks.
Attempted shift
The club moved to Toronto’s College Street about 18 years ago. At the new location, they saw a lot of success — like when Italy won the FIFA World Cup in 2006 — as well as some down times — like the 2008 recession — that prompted Raviele and his father to dip into personal savings to keep the restaurant afloat. Raviele invested more money in the business in 2014 for a renovation and expanded to a second location, a small cafe in Etobicoke, in October 2019.
When COVID-19 hit and government ordered dining rooms to close, Raviele attempted to shift to take away, but eventually stopped. Bills piled up from utility companies.
“I obviously incurred some debt …,” he said.
But uncertainty over the future of dining was the final nail in Il Gatto Nero’s coffin.
‘Don’t see a future’
Raviele speculated he might be required to remove the restaurant’s 10 bar seats and slash his 65-seat capacity in half to comply with pending physical distancing rules, which would cripple his business.
“I don’t see a future for my business or for my family,” he said. “The model for opening any restaurant is based on feeding capacity versus space, and how many people can you do over the course of a night… I mean, if you have one bad weekend, it could be disastrous for many small businesses.”
He plans to focus on the small espresso bar, add a pizza oven and hustle to keep that business going, which he said he invested his second life into.
“I’m angry, because I wanted to do something good, and now the possibility of losing both is always there.”
Mohammed Bin Yahya, co-founder and chief executive at Plentea, found the coronavirus to be “just like the knockout punch” for his Toronto tea bar.
Shifting consumer habits may change retail forever
Dreams of growing
Before the pandemic, the company was struggling to pay some $5,000 in rent. When they shifted to takeaway to abide by health regulations amid the pandemic, foot traffic dropped dramatically.
The tea shop, which Bin Yahya opened in 2015 with dreams of growing to multiple locations, will close at the end of the month.
“The numbers. Straight up, the numbers don’t lie,” he said.
The company had to pay penalties when closing some of their accounts with cleaning companies, internet and phone providers, and others, he said.
“We are in debt,” he said, estimating they’ll owe some $40,000 in the end.
For now, he’s trying to minimize his expenses, and said he may have to find a side job and move in with family to help pay back the loans.
Cajun-and-Creole
But he’s keeping the dream alive. Plentea will continue selling tea online, he said, and — for now — he’ll keep the equipment in storage with the hopes of opening again.
With nearly four decades in the food industry, 77-year-old Frances Wood’s retirement plan relied heavily on the Cajun-and-Creole food restaurant she co-owns, Southern Accent in Toronto.
After 34 years in one location, Wood dipped into her nest egg to help cover a move to a new spot about three years ago. It took some time to build up a new customer base and Wood noticed in recent years, lucky restaurants made 10 per cent in profit.
Still, at the start of this year, she started seeing “the light at the end of the tunnel” in making the new location work.
She debated selling the restaurant after her five-year lease ended. But with about 1½ years to go, COVID-19 hit.
Southern Accent also attempted takeaway and delivery, but found with high delivery app fees, it was losing money each day it stayed open.
‘A miracle’
Wood and her co-owner decided to close permanently in April and have about $60,000 in loans and bills to pay back between them.
In what Wood called “a miracle,” their landlord released them from their roughly $10,000 monthly lease early, Wood said.
“I don’t know what we would have done. We would have to go personally bankrupt, I guess” had that not happened, she said.
The next phase of the septuagenarian’s life “doesn’t look very good.” Wood didn’t draw a salary for the past several years, but the restaurant did pay some of her expenses. She collects Old Age Security, the Canada Pension Plan and has some personal savings, but that hardly covers her monthly expenses.
“My livelihood, what I was expecting to have at the end of 37 years in the restaurant business was some money from the restaurant when I sold it to help with my senior years.”
She planned to sell the name and recipes, and help set the buyer up for success. She even kept the restaurant’s 1940s bar in case a buyer emerges. It’s tucked away in the garage.
Still, she considers herself lucky all things considered.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
