Cosmoledo, a licensee of French bakery Maison Kayser, filed for bankruptcy Thursday and is seeking a sale due to the effects of the COVID pandemic.
Maison Kayser is an artisanal French boulangerie initially formed in 1996 in Paris. Currently, the brand has 150 shops in more than 22 countries. Cosmoledo operates 16 Maison Kayser units across New York.
According to the filing, Cosmoledo is seeking the court’s approval of Aurify Brands as a “stalking horse” bidder. As part of the asset purchase agreement, Aurify intends to buy all or substantially all assets in exchange for $3 million plus the value of the credit bid and the assumption of liabilities.
Cosmoledo listed assets between $10 million and $50 million and liabilities between $50 million and $100 million. The brand received a $6.7 million Paycheck Protection Program loan in April.
Prior to the crisis, the company wanted to expand nationally in a short period. At its peak, Cosmoledo made products from scratch in bakery-enabled stores and two large commissaries. The brand opened stores in Washington, D.C., but they dragged profitability. As a result, Cosmoledo formed a restructuring strategy that included recapitalization of the company, reorganization of production facilities, reduction of footprint, and revision of store-level management.
The strategy rolled out in 2019 and was mostly completed in Q1 of 2020. But during the restructuring process, business was slammed by the COVID pandemic. Around 800 employees were furloughed, and the company shut down operations.
The company anticipated that in-store dining would resume in June, but it became clear that New York’s phased approach wouldn’t allow enough operations to recover financially. The state planned to reopen in-store dining on July 6, but it was pushed back indefinitely due to rising COVID cases.
Faced with an uncertain future, Cosmoledo decided to not reopen stores and sought restructuring alternatives in mid-July. It wasn’t until Wednesday that New York Gov. Andrew Cuomo announced that in-store dining would return to NYC on September 30.
“After analyzing the financial impact stemming from the macro economic factors impacting the restaurant industry, of the loss of in-Store dining revenue and the continued overhead required to sustain even limited operations (take-out and delivery), the Company determined that there was too great a risk that future operations would fail to generate sufficient capital to repay its obligations in the ordinary course of its business and continue profitable operations,” CEO José Alcalay said in the court filing.
Earlier this year, Aurify purchased the U.S. arm of Belgian bakery chain Le Pain Quotidien for $3 million. The operator, which also has investments in Melt Shop, The Little Beet and The Little Beet Table, Fields Good Chicken, and Five Guys, announced in June that it planned to reopen more than 40 of the 98 Le Pain Quotidien units.