Doughnut Time closes all its stores after rescue deal falls over
Written on the 14 March 2018 by Ben Hall
Retail food chain Doughnut Time has gone into liquidation and has closed all its stores just a week after it entered administration with the new CEO vowing to "turn the business around".
Most of Doughnut Time's 30 stores were closed in January and February and on Friday The Australian Securities and Investments Commission (ASIC) published its insolvency notices with appointed liquidators and Doughnut Time's parent company and its remaining five stores were included.
Liquidator and receivers Menzies Advisory confirmed the remaining locations in Sydney, Melbourne and the Gold Coast were also shut down last week.
Last week, it was reported the former CEO of Doughnut Time, Dan Strachotta, had struck a deal to buy the company from founder Damian Griffiths with a plan to turn the business around.
However, the ABC reports that Doughnut Time Victoria state manager Vanessa Gaddi-Chmielewski emailed workers last week to tell them that Griffiths had blocked the deal.
"Today has been the last day of Doughnut Time. I just received news from Dan that the deal with the new company has been blocked by Damian. He will not sign the Doughnut Time trademark to Dan," Gaddi-Chmielewski wrote.
"As a result: The entire company will go into liquidation including the stores that Dan was supposed to take over. The sale has not been completed. Doughnut Time will be put into the hands of appointed liquidators/administrators. We don't yet know who they will be and what they will decide to do with the company."
Doughnut Time's rise and fall has been rapid. The first store was a hole-in-the-wall in Brisbane's Fortitude Valley in 2015 and it quickly grew to 30 outlets. The closures have been blamed on high rents.
Its workers are owed an estimated $200,000 in unpaid wages and it's been reported the liquidators say "there is no money anywhere".
Business News Australia
Author: Ben Hall