Famed soul food hot spot The Pink Tea Cup in New York City´s Greenwich Village has filed for bankruptcy. According to statements by the restaurant´s attorney, the eatery needs time to pay off debts it ran up while it lacked a liquor license.
Since its opening 55 years ago, the Pink Tea Cup, while popular and has hosted such celebrates as Sean Combs and Russell Simmons, has faced various business problems. It has closed and moved twice. Last year it relocated to its currently location, but it did not have a liquor license for at least six months, says attorney David Biondi, who filed the restaurant´s Chapter 11 Bankruptcy papers. The filing states that the Pink Tea Cup has between $50,000 and $100,000 in assets and between $100,000 and $500,000 in liabilities, of which $79,747 is owed to its landlord. In 2010, businessman Lawrence Page took over the restaurant.
Being unable to serve liquor can drastically cut a restuarant´s profits, notes Amar Modi, chief operating officer, Foodtoeat.com, which works with restaurants in New York for catering and online ordering. “Alcohol sales account for 10-15% of a restaurant's total annual sales. However this number greatly differs from restaurant to restaurant, for restaurants that are more popular dinner spots that specialize in wine pairings or specialty cocktails, liquor sales are closer to 1/3 of the restaurant's total profit,” Modi explains.
And according to recent stats, more people are drinking when they dine out. “Alcohol continues to defy recession trends with steady sales,” adds Modi. But to make up for a loss in spirits sales, Modi says a restaurant can offer other services. “One way that many upscale restaurants can increase their profits is through delivery,” explains Modi. “While not the most glamorous of options, delivery opens the restaurant up to an entirely new market of people who still appreciate great food but don't require the ambiance of eating out. Many upscale Italian restaurants in NYC have expanded into delivery to capitalize on lunch and late-night orders, while still keeping their dining rooms packed with customers.”
