Chippendale: Fika Cafe by Cuppa Flower in voluntary administration
A trendy Sydney cafe loved by influencers and Instagamers has closed – with COVID-19 forcing them to enter into voluntary administration.
Central Sydney
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A beloved Chippendale cafe which closed its doors due to the COVID-19 pandemic has gone into voluntary administration.
The florist/cafe hybrid Fika by Cuppa Flower announced to its loyal Instagram followers in late March that it would be temporarily shutting due to the pandemic.
“We’ve decide to close our shop for a short while,” they posted.
“We hope everyone are (sic) safe and we’re grateful for all your support through this (sic) tough times. We’re all in this together. Thank you and hope to serve you all soon.”
However, with the bills stacking up, owners Chanlin “Lynn” Kong and Wei “Carol” Xu made the decision to place the company Cuppa Edge, which runs the Chippendale cafe, into voluntary administration last week.
The successful duo’s original two Cuppa Flower cafes in Mascot and Waterloo, which boast 20,000 Instagram followers, are run by a separate company and have continued to trade.
Worrells Solvency and Forensic Accountants partner Christopher Darin was appointed as administrator of Fika, whose combination of rainbow blooms and equally colourful culinary creations have garnered it a cult following.
Mr Darin said he had just begun the process of reviewing the company’s position and reasons for failure but he remained optimistic.
He said the pandemic had placed pressure on the business’ working capital making it difficult for them to pay creditors including the Australian Taxation Office.
“While we are still in the initial stages of the appointment, stakeholders have been supportive including the landlord, providing rent relief during this difficult time and we are working with the directors and other stakeholders to explore the options to propose a Deed of Company Arrangement,” Mr Darin said.
“I am hoping that the cafe will open its doors again soon.”
A Deed of Company Arrangement is a binding agreement between a company and its creditors which aims to give the business the best chance of continuing to operate while ensuring those who are owed money get the maximum return.
Fika’s creditors will meet via teleconference on July 1.
Mr Darin urged other businesses struggling during the coronavirus to reach out for help.