How this Italian restaurant owner's business is coping amid COVID-19

Across the country, restaurants are being forced to shut down as coronavirus cases rise. And in New York, businesses are only allowed to offer take-out or delivery options, in a bid to enforce social distancing. Yahoo Finance's Sibile Marcellus and NYC business owner Gianfranco Sorrentino joined The Ticker to discuss how restaurants are dealing with the new regulations.

Video Transcript

- Across the country, right now restaurants are being forced to shut down service as coronavirus cases grow in the US. And in New York, businesses are only allowed to offer takeout or delivery options, in a bid to enforce social distancing. So joining us now to discuss this is the owner of three New York City Italian restaurants, Gianfranco Sorrentino, along with Yahoo Finance's Sibile Marcellus.

And Gianfranco, I just want to start with the reaction that you've seen, how it's played out in the timeline to where we've gotten today, as now, really, you can only offer to-go meals.

GIANFRANCO SORRENTINO: Yes. It's been already now eight of nine days that the business went all the way south. We had the really-- the last the day said decrease in the 90%. We had guests that are coming to the restaurant in the single digit-- the lunch and the dinner.

SIBILE MARCELLUS: So tell me about the economic cost you face so far. I know you own three restaurants, plus a catering business, and you're the president of a restaurant association. So how is it all added up?

GIANFRANCO SORRENTINO: Well, the catering business is completely finished. We had cancellation for the months of March, April, May, and June for over $400,000. And right now, we are dealing with our client regarding the deposit that they made. Some they wanted to be reimbursed. For some, they are postponing events after June and July.

The restaurants are completely shut down over governor order. And our loss, right now, let's say just to keep the restaurant as they are right now, costing me $150,000 per month. That's not including the rent, but I'm including the health insurance that we guarantee, no matter what, to all our employees, the insurance liability, the real estate tax, and the utilities that we have to pay.

And we are nigh on the verge to talk with the landlord, and to see what they can do to help us, because this is really a crisis anyway.

- So I know a lot of restaurants have pivoted to delivery because they can't keep their doors open. What are you considering on that front? Does it make economic sense to keep some staff around to keep that demand going? Or are you-- are you getting any calls at all from people who are wanting to do that kind of take out?

GIANFRANCO SORRENTINO: It's so strange, because all my life, I've been pushing to come to the restaurant. Don't take it delivery, you know? And now I have to push for the delivery and take out.

I am the president of Gruppo Italiano, a nonprofit organization with 408 members, mainly restaurateurs. And I've been talking with them every day for the last week. And we didn't see the increase in the takeaway and the delivery order. The increase was a 10% or 15%. It went down to even less, because all the offices are closed, mandatory to work from home.

MOMA is closed. The Broadway's closed. So there is no traffic whatsoever. So the increase on 10% on the delivery and the take out doesn't pay for the costs that you're going to have, having a few people in the kitchen, a few porters, and then the delivery guys.

SIBILE MARCELLUS: So how many employees do you have in total at the catering business and the three restaurants? And how much have you reduced it now because of the ban?

GIANFRANCO SORRENTINO: Right now, we are completely closed, all the restaurant and the catering. So we are at zero employees right now. We have 160 full-time employees, plus we have another 20 part-time employees.

Yesterday morning, we had a general meeting with all the-- our co-workers, all our collaborators. And we saw the option that we have some of our staff, they're going to go on unemployment. And we're hoping that the Senate will pass the new package that has been brought to by the Congress, so they can apply also for the family paid leave.

Those are palliative, of course. They're not going to cover the money that they were used to make. But at least it's going to help them.

SIBILE MARCELLUS: So what kind of aid would you like from the government-- you mentioned the Senate there-- that would actually help you retain those workers?

GIANFRANCO SORRENTINO: Well, first of all, are we asking, and as Gruppo Italiano, we're pushing the governor to give us a break on the payment of the sales tax from 30 days to 90 days, the payment of liquors and wine from 30 days to 90 days, and also to freeze all of the-- the loan, rent, et cetera payment, so they can have-- we can breathe for a while. Right now, we also don't have an idea when we're going to reopen. So as you can imagine, even keeping the restaurant closed, we have costs that we have to pay.

- So how many-- how many months can you last? You say right now you're not sure. You're closed. You have no business at this point. And we have no idea how long this closure is gonna last.

GIANFRANCO SORRENTINO: Yes.

- When you look at your finances, how many months are you planning for?

GIANFRANCO SORRENTINO: Yes, that was yesterday, actually, we went through our PNL balance sheet and the cash that we have in the bank. And we have a strong company, so we can last several months anyway. But after June and July, we're going to have a program.

- You're gonna have a problem in June or July? That's interesting, since the president yesterday said that there's a chance it could go to August, when we think about all of this. Hopefully not as drastic as shutting down everything, but there is still a chance of that.

When we talk about potentially tapping the loan market here, some credit to make you last longer than just June or July, how has that been, when you've maybe assessed potential opportunities out there for you?

GIANFRANCO SORRENTINO: As far as I know, the loan, which has to be also guaranteed from other things, anyway, is for $75,000, which, you know, covers me 15 days at keeping the restaurant open. So really it's not going to help me a lot. I think that the government has to decide, and they have to tell us what they want to do specifically to help our industry.

We depend also from the hotels, from the museums, from Broadway, from the shopping, from the office coming back to work in the midtown. So who decide what to do to make it the going again around, anyway.

- Well, hopefully it doesn't last as long as some people are saying, and hopefully you can get back to opening your doors and serving customers once again. But for now, Gianfranco Sorrentino, thank you so much for joining us. And Sibile Marcellus, thank you for bringing us that. Appreciate it.