Coronavirus: Hong Kong bakery chain Crostini closes all 15 retail stores, leaving behind disgruntled customers

Bakery chain Crostini has closed all 15 of its retail outlets in Hong Kong, blaming the end of the rent deferral scheme and leaving many customers stuck holding prepaid cake coupons feeling disgruntled and cheated.

Posting on its Facebook page on Tuesday night, the company said it had struggled to remain profitable and offered apologies and thanks to customers and staff.

“Many sectors have been greatly affected amid the pandemic,” it said. “It is a pity that Crostini cannot turn things around and has no choice but to make a grave and disappointing decision.”

All of its outlets would cease operations after Tuesday, the company said.

Customers left messages on the company’s Facebook page expressing frustration over being suddenly left with store credit, with some saying they bought prepaid vouchers at a recent exhibition for the purposes of weddings.

Some accused Crostini of fraud, claiming the bakery had continued to sell the vouchers despite planning to close down.

A customer called Yandy said she bought over HK$6,000 (US$765) worth of cake vouchers in July for her coming wedding and now she hoped to get a refund.

“I just sent out some vouchers to my wedding guests. But now I need to take them back and find another cake shop for the vouchers,” she said.

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Crostini’s founder Wong Kwong-fai told local media that landlords started to chase him for payment after the government’s rent deferral scheme, which allowed local businesses to delay payments for up to three months, ended in July.

“We’ve been looking for ways to rescue our company and I even borrowed loans of HK$80 million to pay staff’s salaries and were looking for new investors,” Wong said.

“But after the rent deferral scheme ended in July, our shopping mall landlords started to chase up the accrued rental payment from us. We didn’t have enough cash flow so we decided to close down our company.”

As for the prepaid vouchers, Wong emphasised he never intended to deceive customers.

“Our liquidator will see how to handle their cases. But all along we didn’t want to shut down our company. We just can’t cope with the rent,” he said.

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Lam Tsin-kwok, chairman of the Eating Establishment Employees General Union, on Wednesday said so far about 100 workers had sought help from the organisation. The staff members accused Crostini of owing them two months’ wages, or roughly HK$3 million in total.

“So far we still cannot reach the company boss. We have notified the Labour Department and plan to apply for ex gratia payment from the Protection of Wages on Insolvency Fund to pay for the workers’ unpaid wages,” Lam said.

Gilly Wong Fung-han, chief executive of the Consumer Council, said the watchdog had received one complaint from a resident who had been left with HK$2,300 in prepaid Crostini vouchers.

“Those using credit cards to purchase the prepaid vouchers should keep their receipts and check with their issuing banks to see if there could be a refund arrangement,” she said.

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“However, those who pay in monthly instalments are unlikely to get a refund as they are borrowing money from banks to settle the payment.”

Wong also advised customers to register as the company’s debtors once a liquidator was appointed. “When the company pays off its debts, customers still have a chance to get their money back,” she said.

Without naming Crostini, the Customs and Excise Department said on Wednesday night it was highly concerned about the sudden closure of a bakery chain and had set up a team to follow up. It said it would take enforcement action if there was any violation of the Trade Descriptions Ordinance.

The department had received one complaint as of 5pm on Wednesday and appealed to other affected consumers to contact it as soon as possible.

Under the Trade Descriptions Ordinance, it is an offence if a trader provides a materially different product or intends not to supply at all when he or she accepts payment.

The maximum penalty upon conviction is a fine of $500,000 and imprisonment for five years.