Foundation owners Claire and Paul Gibson. Photo / Supplied
Foundation owners Claire and Paul Gibson. Photo / Supplied
Paul Gibson and his 35 staff at gastropub Foundation had posted their best December in nine years, and with January and February takings also up, were looking forward to setting new records come winter, their busiest time of the year.
By three weeks into March they'd lost 80 per centof their trade.
Today Gibson and his wife Claire are staring down the possibility of financial ruin and years of hard work in a gruellingly tough sector disappearing into the black hole that is Covid-19.
Their $4.5 million revenue restaurant and bar on a northern corner of Te Awa at The Base, the sprawling shopping mecca at Te Rapa in Hamilton, is shuttered and echoing, its big sports TV screens blind, the beer taps a frozen upright tableau, tables occupied only by ghosts of happier times.
Gibson is still struggling to absorb the speed of the calamity that's befallen his business.
It's the only restaurant bar at The Base, one of its top three biggest employers and until the spectre of the virus arrived, was serving 4000 meals a week. Up to 70 per cent of Foundation's business was food.
The business has $1 million of insurance cover - its premiums, around $15,000 a year.
It's covered for almost every other business disaster than a pandemic.
"You can't plan for an event like this, it's impossible," says Gibson.
"People like to be in control of what they're doing. There's no control here. We're just passengers."
No staff - 20 of them fulltimers, some who've worked for Gibson for 10 years - have yet been laid off, thanks to the Government's wage subsidy offer. But 10, who Gibson says earn more than $1000 a week, are taking a big pay cut because of the limits of the scheme - and Foundation's financial resources.
With no income, the business is leaking about $60,000 a month, Gibson says.
He paid the latest rent bill - $37,000 for the month - on April 1.
The Base manager and half-owner, listed Kiwi Property, has yet to inform Gibson of its decision on lockdown rent obligations. Tainui Group Holdings, the commercial development arm of Waikato-Tainui, is the co-owner. Gibson hopes for a rent holiday or a rent reduction, and for the Government to step up with measures for commercial property rents.
Without trading, and without taking on any more debt, Foundation could survive about four months from lockdown day March 25, says Gibson. But no-one knows how much longer the contagion will last and the business is locked into its lease for another 18 months.
That's what left to run on its 10-year lease on the premises, in which the company has invested about $2.5m in fit-out and improvements over the years. (The company can take up further lease offers after the 18 months are up.)
Gibson's optimistic Foundation will live through this.
But he's equally aware of the potential for the couple "to lose everything" if it drags on and normality - whatever that might be - doesn't return soon.
"Even if the business falls over and we close the doors forever, we are still required to pay our lease.
"We'd be bankrupt. We'd lose everything, the house, everything. Pretty much 15 to 20 years of work would be gone and it's completely out of our control.
Foundation at Te Awa, The Base employs 35 and served 4000 meals a week. Photo / Supplied
"I'd understand if the business had been badly managed. But we've had a successful business. There's no certainty what's going to happen."
Gibson, who as a paid employee is taking part of the Government wage subsidy "to pay the mortgage and the family bills", says he's coping "okay" at the moment.
Probably better than in the immediate lead-up to the lockdown when he and his wife "weren't in good shape" with their business drying up by the day and alert level 4 not yet announced to try to contain the virus' spread.
About $30,000 worth of non-perishable stock is in storage and the couple gave away $5000 worth of food to staff on the eve of the lockdown. About $5000 of beer will have spoiled since.
Gibson's haunted by the thought that more than 15 years' hard graft to build a name in the notoriously challenging hospitality industry could be wasted.
He and his wife were cornerstone shareholder-founders of Foundation in 2011.
Gibson had been managing Te Rapa hospitality icon, the English-styled Cock and Bull, for seven years when the restaurant opportunity at the nearby Base came up.
It was too good to miss. With plenty of through-mall foot traffic and movie theatres upstairs there would be a good balance of day and night trade.
"The owners of Cock and Bull had pubs in Auckland, one was at the Botany Downs shopping centre and the most successful pub they had. So we knew bars and restaurants in shopping malls worked."
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The Gibsons put down 20 per cent to help create Foundation and two years later bought out the other shareholders.
Gibson thinks the Government's "done a fantastic job with what they've had to deal with".
"They probably should've locked the borders a bit quicker but they had a lot to get in place before they could do that. They've done exceedingly well from what I see of the rest of the world."
When the worst is over, the virus is expected to have caused a seismic change in the way Kiwis operate and behave. Does Gibson think big change is ahead for the hospitality culture too?
"Probably in the short to medium term. But this is a once-in-a-lifetime event, so hopefully a sense of normality will come back in time.
"I'm optimistic. I don't know what the new normal will be but I'm hopeful it will be close to where we were before this happened."
