(Yicai Global) June 21 -- Ichido has become the latest casualty of the Covid-19 pandemic as a severe drop in footfall at its many downtown outlets has meant the popular Shanghai bakery chain has been unable to pay wages and suppliers, giving it no choice but to close down.

The Shanghai-based firm, which was forced to shut 70 of its outlets last year, has racked up wage arrears and unpaid dues to suppliers of over CNY8 million (USD1.2 million), Xinmin Evening News reported, citing Cai Bingrong, who is founder and president of the company.

Wages to over 200 staff have gone unpaid for the last three months and employees’ social security benefits have not been paid for almost a year, the report said. Many of its staff have quit and the stores have been forced to close.

A popular bread, pastry and cookie brand, Ichido invested heavily in increasing its presence in the city’s subway stations around 2016, opening 105 stories in the following two to three years, which contributed 75 percent of the company’s revenue. However, after the Covid-19 outbreak, customer traffic in these underground outlets fell heavily and many had no revenue for months.

There remains, however, some unresolved business as Ichido has issued CNY50 million (USD7.7 million) worth of coupons since 2016, CNY20 million of which has yet to be redeemed, Cai said. Ichido is on the lookout for investors who can help it to re-open between eight and 15 shops so as to enable customers to use up their vouchers. CNY40 million (USD6.2 million) is all that is needed, he added.

The government of Shanghai’s Minhang district, where Ichido is based, is in talks with Cai about the redemption of these coupons, the report said.

Editor: Kim Taylor