SINGAPORE, Oct 14 — All 11 Flash Coffee outlets across Singapore have closed after its owners told regulators that they were unable to keep operating due to liabilities.
The company has been placed into provisional liquidation. This usually means that an appointed firm is trying to recover money for creditors while sometimes trying to keep running the business.
The move came on the back of suggestions of unrest among workers at the grab-and-go chain of coffee outlets and claims of employees were being paid late.
A TikTok video posted on Thursday evening shows a sign at its Jurong Point outlet asserting that its baristas are “on strike” due to several late salary payouts.
The sign also said that the outlet would be “closed indefinitely”.
As of 1pm yesterday, the sign from the TikTok video had been removed at Jurong Point when TODAY checked.
The TikTok user who posted the video and goes by the username “DR-Review” told TODAY that he had intended to get coffee at the outlet at around 8pm on Thursday when he spotted the sign.
The company told CNA news channel that its staff members were not on strike.
“We ceased operations at our 11 stores and consequently, our baristas are not required to report to work.”
Flash Coffee also told CNA that to build a profitable and sustainable business, it decided to “further consolidate our future efforts and to double down on our most promising markets”.
“To facilitate this renewed focus, we ceased operations in Singapore yesterday, comprising 11 stores out of our (around) 200 global stores,” it added.
The Business Times reported yesterday that Flash Coffee had “filed for a voluntary winding-up due to its liabilities”.
A document seen and verified by TODAY states that Flash Coffee was placed under provisional liquidation on Thursday. The provisional liquidator is BDO Singapore.
During the process, the liquidators, if appointed at a meeting of creditors, would try to get as much money as possible from its assets to pay creditors, the letter stated.
TODAY visited five Flash Coffee outlets across the island on Friday — at Guoco Mall, Paya Lebar Quarter, Jurong Point, 1 George Street, and Keppel Bay Tower — and found that none was in operation.
The Guoco Mall outlet had been shuttered, with a notice posted by mall management TPC commercial indicating that the unit had been repossessed.
TODAY understands that the space Flash Coffee occupied along George Street was shared with another food-and-beverage business.
Flash Coffee employees there had “not turned up for at least 10 or more days” on separate occasions in the past three months, which had hurt the business of its collaborator. This was what an employee from the F&B business on George Street said.
Salary payments delayed
TODAY spoke to a former employee of Flash Coffee, who did not want to be identified.
She said that she had worked at the coffee chain as a part-time barista for nearly two years before leaving in the middle of this year.
The woman claimed that her salary payments for three months — December 2022, March and April 2023 — were delayed by several days.
When asked how she and her colleagues felt about the delays, she said that they “were frustrated but still continued to work”.
“Most of their full-timers were Malaysians, so they don’t really know or dare to speak up,” she said, adding that one of her colleagues was not paid her sales incentives despite hitting her required sales targets in December 2021.
The former employee said that although she had not expected a strike, she had expected the chain to shut down for a while “because they weren’t making much money from their daily sales”.
She added that employees of several outlets would have to work alone on the weekends without time to go for their hour-long break.
The TikTok user “DR-Review” said that he had usually seen “only one staff member working most of the time” at the chain’s Jurong Point outlet.
A former employee from Flash Coffee’s corporate office, who also declined to be named, said that his monthly salary had been delayed on two separate occasions this year.
The delays were two to four weeks, he added.
The firm had laid off large numbers of staff member in November 2022, which had left the remaining workers in low spirits, he said. The delayed salary payments added to the low morale.
“They had at least three rounds of layoffs and culled many people who were executives and people doing the actual ground work.
“It left a very top-heavy structure where people just talked about grand plans but with no one to follow through with the heavy lifting. So it was very hard to move the needle as a result.”
In a recent message on one of the firm’s WhatsApp chat groups seen by TODAY, the firm’s founder David Brunier and its director Sebastian Hannecker said that they were “working around the clock” to pay its employees’ outstanding salaries.
Flash Coffee also told CNA it is “proactively assisting” affected team members.
“Most of our Singapore head office staff have been offered roles in other markets or with our regional team. Additionally, we are actively trying to connect our baristas with opportunities in other coffee chains,” it added.
Raised S$68 million in funding in May 2023
The Singapore-based company, which describes itself as a technology-enabled coffee chain, announced earlier in May that it had raised a total of US$50 million (RM236.4 million) for the business.
Various venture capital funds including White Star Capital, Delivery Hero, Geschwister Oetker, and Conny & Co took part in the round, with some increasing their stake in the company, a Flash Coffee statement on its website stated in May.
“The new funds will be channelled towards accelerating the company’s mission to achieve group-level profitability,” the statement read.
“This includes sustainably growing its footprint across the Asia-Pacific region to serve high-quality specialty coffee to customers in Singapore, Indonesia, Thailand, Hong Kong and South Korea, doubling down on technology and product innovation and further developing the sales performance of existing stores.”
The Singapore-based coffee chain first launched in 2020 and, at one point, had close to 250 stores and 1,400 employees across the region.
TODAY has asked Flash Coffee for comments. ― TODAY
