“I am the company director and I take all the blame. But I will save it”: MissChu up for sale
Tuesday, January 13, 2015/
Nahji Chu is fighting to keep her business dream alive
Vietnamese restaurant chain MissChu is up for sale and gaining plenty of interest from buyers, according to administrators, but its founder, Nahji Chu, says she will attempt to save the business herself.
Chu has taken to Facebook for a second time to thank followers and ask them to continue to support the Sydney arm of the business, which collapsed into voluntary administration in December.
“Am I begging, am I pleading? Yes, a little bit. But in my heart this simply feels like a call to action: GO AND EAT MISSCHU FOOD!” read the Facebook post.
Meanwhile, an advertisement for expressions of interest in the sale of MissChu as a going concern appeared in this morning’s Australian Financial Review newspaper. Six of the chain’s Sydney tuckshops are for sale, as well as a commercial kitchen in Darlinghurst.
Michael Smith, spokesperson for administrators KordaMentha, confirmed to SmartCompany there had already been over 30 enquiries in the business.
“There has been a lot of interest. It’s clear that it’s a good brand, in a sector that is still doing well and it’s still fundamentally trading well,” Smith says.
“We don’t know how serious they [the interest parties] are until we go through this formal process. We will have to wait and see the colour of their money.”
MissChu has $4 million in debt, according to Smith, made up of around $300,000 to $400,000 owed to secured creditors, $1.2 million owed to unsecured trade creditors and the Australian Tax Office, and up to $1.3 million owed in employee entitlements.
“The problem was that it built up a whole lot of fixed costs that were not sustainable,” says Smith.
He says many of those fixed costs have been substantially reduced since the redundancy of 60 employees and the transfer of another 60 full-time employees to part-time status.
“You can imagine that brings down fixed costs and makes a big difference. Serious buyers can do those numbers and work out how healthy the business is,” says Smith.
He also says MissChu’s Melbourne and London arms have been “relatively quarantined” from such fixed cost pressures.
Chu used her public announcement to also defend her character to any “trollers”, but took full responsibility for the collapse.
“The temporary failure of MissChu Sydney has to be mine. I am the company director and I take all the blame. But I will save it… I’m still here running the business and will forever more, no matter who buys the company,” she said.
Smith says based on the comments, it appears Chu is interested in buying back the company.
“Judging from her public comments, Miss [Nahji] Chu is keen to buy back the business. We will see how that goes,” he says.
Smith says Chu needs to either join the other bidders to make an offer for sale, or put forward a Deed of Company Arrangement, which KordaMentha would have to consider on its merits. He says once administrators have all indicative bidders, they will have a reasonable estimate of the value of the business.
“If they [those offers] are more promising than a Deed of Company Arrangement, then the administrators are legally required to do what’s in the best interest of the business,” he says.
Expressions of interest close January 27 and the second meeting of creditors will be held on February 9, after KordaMentha circulated a written report that will go into some detail of the reasons behind the debt.
In her post, Chu said: “$4 million in debt sounds awful until you look at it in context of how much it takes to run a Hospitality business in Australia and how many stores we have in operation – 6!”
“I have taken literally nothing from MissChu. I own no property and I pay my rent each month like most of you – everything I have done over the past 8 years has been for the business and to try to change people’s perceptions on what it is to be a refugee and a new Australian.”
Chu, a refugee to Australia, started MissChu as a Vietnamese street food-style catering business in 2007, quickly expanding her cuisine into retail tuckshops in Sydney, Melbourne and London.
She now claims it was the move to London was a “mistake” that “grew in the wrong direction at the last minute”.
Chu also used the post to point to the failures of other big businesses before they found success, such as Apple and Google.
“No one prepares you for failure (massive failure on the part of the education system and government) and the draconian Australian insolvency laws make an ‘outlaw’ out of our entrepreneurs,” said Chu.
“Winston Churchill once said: success is not final, failure is not fatal. It’s the courage to continue on that counts,” she added.