For a few years now, Riyaaz Amlani-founded Social chain of office-cafes have been the 'it' space where the young and the 'happening' crowd of the country hang out. So an iconic Social, like the one in Hauz Khas Village, or Odeon in Connaught Place in New Delhi feels like almost like a personal loss to the loyal patrons of which Social has plenty.

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The COVID-19 pandemic has caused unprecedented damage to the restaurant industry, and quite a few of the country's well-known cafes and bars have fallen prey. Impresario Handmade Restaurants, which owns iconic brands like Social and Smoke House Deli has lost 4 of its popular outlets in Delhi to the pandemic, including 2 Smoke House Delis and 2 Socials. Two more Socials in Mumbai, are set to down their shutters for good.

"The next few months will be critical for the survival of the restaurant business, as footfalls remain at sub-50 percent levels", Amlani tells CNBC-TV18, but adding that the worst was now behind.

For one, there are going to be more Socials.

"We have not lost any outlets in Bangalore, and are in fact opening up more in Delhi, in Vegas Mall in Dwarka, and we've just opened one in Elante Mall in Chandigarh", Amlani said, adding, "That signifies customer confidence coming back".

Expansion plans which had to be put on hold due to the outbreak of the pandemic are slowly being dusted up. The two new Socials in the North were originally slated to go live in the March-May period.

Impresario has a portfolio of over 50 cafes spread across the country, with brands like antiSOCIAL, Smoke House Deli, Salt Water Café, FLEA Bazaar Café, Ishaara, Slink & Bardot, Soufflé S’il Vous Plaît, Prithvi Cafe, and Mocha.

However, opening up a new venture at a time when revenues are only about 30 percent pre-COVID levels means preparing to bleed cash till business comes back to at least 80-90 levels, at which point a restaurant can make money.

"You have to view the restaurant business in terms of years, not months", Amlani says.

The main reason behind shutting down the restaurants was the lack of agreement with landlords on terms that allowed the cafes to continue operations. In some places, the burden of regulatory compliances like obtaining a fire NOC also played spoilsport.

"We need to understand that business is not going to be normal for a while. It will be 30 percent then 40 percent, slowly inching up to 50 percent of pre-pandemic levels. It will be a slow and painful process and we will need support from our landlords to ensure we can continue to remain open. where we cannot reach agreements fair to both landlords and tenants we will have to take a call and shut down", Amlani said.

He adds, however, that for 90 percent of Impresario's restaurants, renegotiations with landlords have been successful, and that they may be back soon in one or two locations where they have shut.

"Replacing the outlets we have shut is priority number one. We are actively looking for alternative spaces in the markets we were present in, maybe even in different locations. We have built value over the years and we want to preserve it", Amlani says.

Tough road ahead

"In a sense the worst is behind us, which was complete lockdown. But it will get tougher as we always knew that the first 4 months coming out of the lockdown will be the hardest."

Amlani expects business to remain at the sub-50 percent levels in the 3-4 months that follow, inching up incrementally to 100 percent, but that may take a while.

"When business is going to be in the sub-50 percent, things going to be the hardest. Some restaurants will not make it as the numbers will not stack up", he says, adding, "...restaurants have to know they will bleed for a few more months, so they have to capitalise for that. It's a question of a few lakhs now to sustain the businesses we've created by spending crores."

First Published:Oct 1, 2020 11:22 AM IST