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  • Tue. Nov 5th, 2024

Closing and reopening during coronavirus shutdown rollercoaster takes toll on businesses

Inner-Sydney restaurant NOMAD remains shut, but it was not the coronavirus pandemic that forced it out of action initially.

Key points:

  • Shutting down a business can be costly and involve costs of storage, loss of perishable goods and meeting “make good” clauses in leases
  • The Bureau of Statistics says 24pc of businesses receiving financial support expect to close when it is withdrawn
  • Sal Algeri from Deloitte Restructuring says firms in industries already under pressure are less likely to survive further lockdowns

“We haven’t had the best 12 months,” co-owner Rebecca Yazbek told ABC’s The Business.

“We moved down to Melbourne to open NOMAD down here and got a phone call from our staff that the restaurant was on fire.”

In a whirlwind seven weeks, the restaurant reopened at a temporary site down the road.

And then the pandemic hit.

Ms Yazbek and her team were faced with having to pay rent on two sites in order to stay open for takeaway, and with the JobKeeper wage supplement yet to be announced, they decided to cease trading during the shutdown.

A woman with wearing a white blouse against a black background.

Rebecca Yazbek’s restaurant reopened at another site after a fire last year, but shut its doors again due to coronavirus restrictions.(Supplied: Rebecca Yazbek)

“You don’t really have the option of serving 2,000 people a week in takeaway. It’s not the same spend per head as you would get in a restaurant.”

Shutting down and reopening both come with costs

Shutting down is not without its own expense. For NOMAD, there was the cost of leaving the temporary site in the condition required by the lease, as well as storage costs for furniture and more than 2,000 bottles o

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