Prior to the pandemic, Red South Beach was profitable and growing. December 2019 marked the restaurant’s largest gross monthly sales in its history—exceeding $700,000—followed by two record months in January and February 2020. But, without question, small businesses like Red are the most vulnerable to the global macroeconomic impact of COVID-19. Even without the forced shuttering of establishments, a large percentage of the customer base would remain wary of the disease’s spread and simply stay away. Some predict that one in five restaurants in the United States could permanently close as a result of the lost revenue crushing the entire industry.
Luckily for Red South Beach, because of a more typical turnaround and escape from liquidation in 2018, the restaurant’s experienced turnaround professional team was already marshalled and ready to act in defense to this new threat. Aaron Hammer, chair of HMB Legal Counsel's Bankruptcy Group and a longtime turnaround professional, and John Pidcock of Oxford Restructuring Advisors LLP were still on board from the restaurants’ 2018 disassociation from its previous partners and significant financial restructuring to the business itself. As such, Red South Beach responded to the COVID-19 crisis by quickly taking a number of actions designed not only to survive but to emerge financially stronger once the crisis is over.
