A York café business has closed suddenly and plans to relocate to Saudi Arabia after costs in the city became insurmountable.
The Tea Palace’s decision came so quickly that it closed before newly-recruited members of staff could start work there.
And sales director Daniel Ibbotson says that a place selling tea doesn’t fit well with a city more “focused on stag and hen parties”.
He told YorkMix that trade since the end of summer “has been hugely reduced and this alongside the increasing running costs of the location has resulted in the unfortunate decision to close.
“The running costs are continuing to spiral; between rent, rates, wages, and utilities each month there is very little change from £25K.
“Looking into the next six months, we could only see the rates increasing, cost of food items doubling and there is no way in which we can charge over £5 for a pot of tea.”
The business is due to move away from the UK, Daniel said. “The entire business is being relocated to Saudi Arabia and will focus on offering English tea and related British products from both Riyadh and Jeddah store locations.
“We have always had a strong identity in the Middle East and are exploring a new developing market especially with the kingdom’s Vision 2030 goals.”
Ten staff affected
The business employed ten people. “A number of them have left York going to university or back home after final year,” he said.
“I believe the rest are seeking employment elsewhere
“The senior management team are assisting in our Saudi operation.”
One person recently recruited by the Tea Palace told YorkMix: “Me and two people left another tea shop to join, but it closed before we were due to start.”
Daniel said that happened because the decision to close came so suddenly: “It was a decision made after an evening meeting with our accountant at the location.
“In essence we needed another £30k to keep on trading through till next year and we all agreed that the business would not be able to generate that until the Christmas period.
“The decision was made by company directors, and the store manager who recruited that individual was not aware until the next morning.”
Before it became the Tea Palace it was Mr P’s Curious Tavern, launched by the Star Inn chef Andrew Pern. It closed during the Covid crisis.
Daniel said: “The two-floor building is better suited for another multiple chain restaurant or pub.
“We simple don’t have the same level of financial reserves to completely overhaul the site. As you can see from around the street larger national vendors are absorbing the market share due to sheer brand mass.”
He feels “York is becoming a bit too focused on stag and hen parties” and the city is now “aiming at a younger market – more drinking culture rather than a tea and scone”.
He told YorkMix that the business settled up with all its suppliers when it closed. “Yes we paid for all our food items on account. We are in discussions with the landlord to revoke ourselves from the contract.
“The landlord is very understanding actually.”
We reported in July that the Tea Palace’s neighbour business, Crew Clothing, had also closed.
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