Crostini faces heat upon ceasing operations of all retail stores

Local bakery chain Crostini has drawn flak after it suddenly halted operations for all of its retail stores on 13 September. This has led to some consumers reportedly requesting for refunds of prepaid cake coupons. According to its Facebook post on 13 September, Crostini said due to the harsh business environment under the pandemic, the company had to make the decision to cease operations for all of its retail outlets as of 13 September. It also said it had “tried in vain to turn the tide”.

Wong Kwong Fai, the founder of Crostini told local press that landlords had started to chase him for payment after the government’s rent deferral mechanism, which allows local businesses to delay rental payments for up to three months. He added that he had taken loans to repay salaries of staff and the company was looking for new investors but the lack of cash flow made it difficult to pay rents for physical stores.

Wong also explained that the decrease in sales under the pandemic is the main reason for the closure. 

The news has drawn mixed reactions online as a check by MARKETING-INTERACTIVE saw some netizens commented on Crostini's Facebook that they have bought a number of cake coupons but the retailer didn't notify them it will be closing down, while some questioning if this is a scam as the cake shop has stored its coffee machines and cakes way before its announcement of closure. 

Social monitoring firm Meltwater saw a total of 1.34K mentions regarding the incident, with 14% negative sentiments.

In response to the incident, Gilly Wong Fung Han, CEO of the Consumer Council explained during a virtual press conference on 14 September that due to the suddenness of the incident, it expects more complaints to come in regarding the purchasing of a large number of food and drink coupons at Crostini using credit cards and electronic payments. He said there are still unused cash and drink coupons at the cost of HK$2,300.

Wong said that consumers could contact their card issuers to report the incident and request a refund from the corresponding bank via the credit card refund mechanism."If the purchase is made in cash, the relevant company must register as a creditor after entrusting a liquidator, and wait for the company to liquidate and sell all assets to repay the debt," Wong added. 

Wong added that if there is evidence to prove that the merchant has no intention at all, or has no reasonable belief that the merchant can supply the goods included in the gift certificate at the specified time, the merchant may violate the "improper acceptance of payment" under the Trade Descriptions Ordinance. The Consumer Council will discuss with the Customs later to deal with related issues.

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