SINGAPORE: Flash Coffee, a Singapore-based coffee chain, is facing outstanding debts totalling S$14.9 million (US$11 million) owed to approximately 120 creditors.
This was revealed by the accounting firm BDO on Friday (10 Nov), as reported by CNA. BDO further disclosed that this amount includes over S$300,000 owed to employees for salaries and contractual benefits.
Notably, Flash Coffee’s landlords find themselves in a similar predicament, with outstanding sums ranging from $80,000 to $140,000.
In response to inquiries about the timeline for settling unpaid wages, BDO Singapore explained that they are currently in the process of securing assets, making it challenging to provide specific timelines at this stage.
BDO Advisory outlined Flash Coffee’s primary assets, which include bank accounts, equipment such as coffee machines and fridges, and receivables (money owed by debtors to Flash Coffee).
The firm emphasized that these assets, including equipment, are being safeguarded for eventual sale, with the subsequent step being the collection of outstanding debts.
Flash Coffee ceases operations in Singapore last month, refutes employees’ strike allegations
In a sudden move last month, Flash Coffee announced the closure of its 11 outlets islandwide, attributing the discontinuation of its Singapore operations to a “strategic shift” for enhanced profitability and sustainability, focusing on more promising markets.
On October 13, the Food, Drinks and Allied Workers’ Union disclosed that outstanding salaries for Flash Coffee workers include 75% of their September salaries, wages until October 12, and the conversion of unused leave days into monetary compensation.
Established in 2020, Flash Coffee, recognized for its iconic yellow storefront, also operates in various Asian markets, including Indonesia, Thailand, and Hong Kong. By 2021, it had expanded to nearly 30 outlets in Singapore.
The closure in Singapore was part of a total of 200 global stores.
As per the Accounting and Corporate Regulatory Authority (ACRA) portal, Flash Coffee’s status is now recorded as “in liquidation – creditors’ voluntary winding up.”
The Singapore unit, led by directors David Brunier and Sebastian Hannecker, filed notice on Oct 12, citing an inability to continue operations due to liabilities.
On October 12, the closure of the chain in Singapore became publicized through a TikTok video and images posted on Google Maps. These visuals displayed a sign at the Jurong Point outlet, indicating that the baristas were engaged in a strike.
The sign explicitly referenced the closure being a result of “several late salary payouts.”
“Your Flash baristas islandwide deserve a conducive work environment. We thank you for these memories. Till next time, goodbye.””
The company in a statement last month then clarified that their staff in Singapore were “not on strike”, contrary to initial reports.
“We ceased operations at our 11 stores and consequently, our baristas are not required to report to work.”
In a statement, Flash Coffee revealed that the decision to discontinue its Singapore operations was part of a strategic shift to enhance profitability and sustainability by concentrating on more promising markets.
The company asserted its commitment to support affected team members proactively, noting that most of its Singapore head office staff had been offered positions in other markets or within the regional team.
“Additionally, we are actively trying to connect our baristas with opportunities in other coffee chains,” the company said.
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