Hav­ing in­vest­ed close to $1 mil­lion in up­grades to pro­tect its staff and cus­tomers, Pres­tige Hold­ings Ltd (PHL) has been forced to shut its doors as part of the in­creased stay at home or­ders and has now tak­en a de­ci­sion to cut by half, the salaries of its month­ly paid work­ers.

In an in­ter­view with the Sun­day Busi­ness Guardian, PHL CEO, Si­mon Hardy said: “In terms of month­ly paid peo­ple, it’s sim­i­lar sort of an ap­proach, we en­cour­age peo­ple to take va­ca­tion pay and then fol­lowed by pay cuts—and that ap­plies to my­self all the way down.”

Ac­cord­ing to Hardy, PHL is a peo­ple-cen­tred busi­ness that em­ploys ap­prox­i­mate­ly 3,500 peo­ple. He said: “We are a peo­ple busi­ness that is in­volved in food, so this will have a ma­jor im­pact.”

Hardy not­ed that the group has a pro­gres­sive pol­i­cy where­by; they are try­ing to min­imise the im­pact on peo­ple as much as pos­si­ble. How­ev­er, with restau­rants be­ing closed, Hardy not­ed that there are go­ing to be cur­tail­ments.

He ex­plained that the week­ly-paid staff who have va­ca­tion pay, will be able to uti­lize that op­tion and then the com­pa­ny will be pro­vid­ing fi­nan­cial sup­port for the first four weeks, but at dif­fer­ent lev­els .

If restau­rants are still closed Hardy not­ed that the com­pa­ny would then have to re­assess.

We ex­pect­ed this to hap­pen

Hardy told the SBG that his team was al­ready prepar­ing for the ac­tions tak­en by the gov­ern­ment. He said: “We knew at some stage—this is what we saw around the world—at some stage we ex­pect­ed that the restau­rant busi­ness, na­tion­al­ly would be cur­tailed or shut down.”

Ac­cord­ing to Hardy, clos­ing restau­rants was a stage in the nat­ur­al pro­gres­sion of things. He con­tin­ued: “We weren’t quite ex­pect­ing the tim­ing as it hap­pened but we be­lieve it was the right thing to do in the best in­ter­est of the na­tion.”

Hardy not­ed that as a com­pa­ny it would be dif­fi­cult for PHL and every oth­er restau­rant busi­ness. Quot­ing the Prime Min­is­ter Dr Kei­th Row­ley, Hardy said that all should share in the bur­den.

Hardy in­di­cat­ed that there is re­search con­cern­ing de­ci­sive ac­tion to com­bat COVID-19, stat­ing the ef­fects might be more painful, ini­tial­ly, but it is more ef­fec­tive in short­en­ing the length of the COVID-19 im­pact.

The PHL CEO not­ed that there is no rule­book for nav­i­gat­ing the cur­rent cri­sis and that it is be­ing writ­ten as time pro­gress­es.

Be­fore restau­rants were closed, Hardy in­di­cat­ed that PHL had im­ple­ment­ed ex­tra pre­cau­tions to en­sure the safe­ty of its cus­tomers and staff.

He said that the com­pa­ny had put in place, half-hourly hand wash­ing and san­i­ti­za­tion of all hard sur­faces. PHL in­stalled hand san­i­tiz­er units for the cus­tomers in lines and it al­so im­ple­ment­ed pro­tec­tive screens at the coun­ters in the build­ings that of­fered curb­side pick-ups.

As time pro­gressed, Hardy re­vealed the com­pa­ny al­so placed de­cals on the floor to en­sure so­cial dis­tanc­ing was im­ple­ment­ed.

When asked about the cost of these im­ple­men­ta­tions, Hardy said: “I know the screens alone would have cost us about $700,000, the dis­pensers, the chem­i­cals and the de­cals—I don’t know the fi­nal fig­ure but it will be around $800,000 to $1 mil­lion.”

How long can the

brands sur­vive?

While Hardy could not dis­close the pro­ject­ed loss­es of the group dur­ing this cur­rent pe­ri­od, PHL’s an­nu­al re­port in­di­cat­ed that the group earned $1.1 bil­lion in rev­enue for the year end­ed 2019.

One can then make the as­sump­tion that the com­pa­ny’s month­ly rev­enue could pos­si­bly be in the area of $92 mil­lion. Many restau­rants chains had ex­pressed a de­crease in rev­enue by 70 to 90 per cent be­fore the gov­ern­ment man­dat­ed their clo­sure.

Fur­ther­more, Bri­an Fron­tin, CEO of the Trinidad Ho­tels, Restau­rants and Tourism As­so­ci­a­tion (THRTA) re­cent­ly ob­served that restau­rants were be­ing im­pact­ed since March 16.

If these es­ti­mates hold true for PHL, the group stands to lose ap­prox­i­mate­ly $70 to $100 mil­lion or more in gross rev­enue. This num­ber can pos­si­bly be more as PHL’s month­ly wage bill was $16 mil­lion as at 2019. When asked if this would be enough to buffer against the cur­rent loss­es, Hardy said: “We are tak­ing proac­tive steps to min­imise costs at this time.”

He not­ed that labour is a big cost that PHL is try­ing to man­age while as­sist­ing the staff as much as pos­si­ble. Hardy al­so men­tioned that the group is as­sess­ing all of its op­er­at­ing ex­pens­es and cut­ting it to the bare min­i­mum.

Ad­di­tion­al­ly, the PHL CEO said any ma­jor cap­i­tal ex­pen­di­ture for new stores or store en­hance­ments have been put on hold. Hardy re­vealed that the group is al­so in the process of ne­go­ti­at­ing with all sup­pli­ers, in­clud­ing land­lords, for not on­ly de­fer­rals but al­so re­duc­tions.

KFC was de­fen­sive

Hardy, not­ed that of all the brands, which in­cludes KFC, Star­bucks, Sub­way, TGI Fri­days and Piz­za Hut—KFC was the most de­fen­sive of all against the im­pacts of COVID-19.

In­di­cat­ing that the KFC brand is al­most a part of the Trinida­di­an psy­che, Hardy said that on Mon­day night when the clo­sure was of restau­rants was an­nounced, there was a rush.

So much so, Hardy in­di­cat­ed that all the chick­en or­dered from Arawak that day was al­most sold out. He said: “We still had some re­main­ing so we fried it off and do­nat­ed to the Cou­va and Cau­ra staff who are do­ing such an ad­mirable and valiant ef­fort in terms of keep­ing us all safe from COVID-19 and its im­pact.”

Hardy lament­ed that PHL would, un­for­tu­nate­ly, have to for­go do­nat­ing 300 meals a day since restau­rants have been closed.

All in all, Hardy not­ed that the com­pa­ny, as dis­played in its an­nu­al re­port, has low lev­els of net debt and the bal­ance sheet is strong with good cash re­serves. Ad­di­tion­al­ly, he said PHL pos­sess­es an ef­fec­tive and in­no­v­a­tive team that will be work­ing to nav­i­gate the cur­rent cri­sis.

Just as the world sur­vived Span­ish flu, he be­lieves the world will sur­vive COVID-19. Us­ing the old adage Hardy said: “This too shall pass.”