BRATTLEBORO — State and local officials are mobilizing efforts to stave off the negative impact of Koffee Kup’s decision to shutter its Vermont operations, including the closure of its Brattleboro subsidiary, Vermont Bread Company, that eliminated more than 90 local jobs.
The closures were announced suddenly on Monday.
According to a Tuesday news release from Dorset Partners, which specializes in “turnaround management and acquisitions,” Koffee Kup had been struggling to make ends meet for the past four years.
“For each of the last four years Koffee Kup has suffered substantial financial losses and was unable to find a way out of their troubles,” states the news release, which came from Jeff Sands, a “turnaround” specialist at Dorset Partners and the senior advisor in North America for American Industrial Acquisition Corporation, which acquired a majority of the shares of Koffee Kup on April 1. “Employees, lenders, suppliers and customers all went above and beyond to support Koffee Kup during that time.”
The notice states that in the last six months, Koffee Kup was unsuccessful in finding new investors or a new operator for the business who were “willing to commit the resources necessary to bring the company back to health.”
On Monday, the state received a Worker Adjustment and Retraining Notification Act notice from Sands and AIAC stating that Koffee Kup was being shuttered and its 500 employees in Vermont would be out of jobs.
Sands told the Reformer Tuesday the closure was not for the purpose of providing a financial benefit to anyone.
“Four years of losses are the culprit,” said Sands. “Everyone wants a villain storyline, but there’s just not one there. This one just wasn’t salvageable.”
Sands said he was not at liberty to discuss how much Koffee Kup lost over those four years or what was responsible for the losses.
The losses are not stopping at least one baker who wants to acquire Koffee Kup and restart the business.
Michael Pinkowski, who owns SatisPie, a wholesale baker in Rochester, N.Y., and Batter Up Foods in Fulton County, Georgia, said he’s made multiple offers to Key Bank, the primary lien holder, and has been rebuffed each time.
“They were looking for different terms,” Pinkowski told Seven Days. “Each time we made an offer, we thought we were meeting the terms they were requesting, but they were rejected.”
But he’s not giving up.
“I’m hoping I can still get a deal with Key Bank and restore the three plants to operating status,” he told the Reformer Wednesday. “The offer is for all plants and assets — Superior [Bakery in Connecticut], Vermont Bread Company and Koffee Kup. I made another offer this morning to Key Bank. I’m waiting on a response on my Monday evening offer and now this morning’s offer.”
“The sudden closure of Koffee Kup Bakery is truly an unfortunate situation for all concerned,” wrote Karen Crane, senior communications manager for Key Bank in an email to the Reformer. “We understand that the statements made [by Pinkowski] raise questions; however, please understand that KeyBank is not able to comment on client agreements or negotiations for privacy and legal reasons.”
On April 26, AICA issued a required WARN notice, in which Sands wrote that he was unable to provide an earlier notice to the state “as we were uncertain of the success of the efforts that we have been making to continue operating. Earlier notice of this unfortunate outcome would have been premature and would have jeopardized those very efforts.”
During Gov. Phil Scott’s regular Tuesday press conference, the governor and Michael Harrington, the deputy commissioner of the Vermont Department of Labor, said they were reviewing the abrupt closure of Koffee Kup and Vermont Bread Company. Harrington said the Department of Labor’s legal team is reviewing the way the Warn notice was provided and if it followed the letter of the law.
“Vermont’s Notice of Potential Layoff Act requires that employers notify the state 45-days prior to closure, and municipalities and affected employees 30-days prior to closure,” he stated. “In specific instances, employers may qualify for an exemption to the prior notice clause.”
“We’ll be having conversations with the company to better understand what activities were occurring prior to issuing the [WARN] notice ...” said Harrington. “I think we would agree, and I think the company would probably also agree, that they would have loved to have been able to give as much notice as possible. I also know that when companies are struggling and working on turnaround solutions, those are very protected pieces of information. And so you’re also not wanting to provide either false hope or false awareness of a company’s concerns or struggles.”
On Wednesday, Harrington issued a news release, stating the department’s Workforce Development and Unemployment Insurance divisions have begun the process of coordinating rapid response services.
“Additionally,” stated Harrington, “a number of employers across the state have contacted the Department of Labor interested in hiring individuals who were impacted by this closure.”
Koffee Kup employees who lost their jobs can contact the Department of Labor’s Workforce Development division directly at https://labor.vermont.gov/Jobs, or by calling 802-863-7676 for individuals in the Burlington-area or at 802-254-4555 for individuals in the Brattleboro-area.
Tim Wessel, a member of the Brattleboro Select Board, wrote on social media Tueday that “Brattleboro has been blindsided by this abrupt closure at VBC and this callous move does seem to be driven by outside investors.”
On Wednesday, Wessel posted again, stating Vermont and the Brattleboro Development Credit Corporation are collaborating on an effort to save the company from closure.
“I think this is a long shot but the effort is being made,” wrote Wessel, who said he was speaking for himself and not the other members of the board.
But, noted Wessel, while the town is here to help, “events are largely our of our control.”
Adam Grinold, the executive director of Brattleboro Development Credit Corporation, told the Reformer he has been “burning up the phones” trying to find a solution but had no other information at this time.
A direct competitor of Vermont Bread Company said if nothing is done in the next day or two to save the Brattleboro bakery, it might be too late.
“I was just on the phone with Hannaford today about replacing Vermont Bread on its shelves,” said Daniel Leader, of Bread Alone in Kingston, N.Y., who had to tell the chain it was impossible at this time.
“We can’t meet the demand without more employees,” Leader told the Reformer.
Bread Alone, which was founded in 1983, has 220 employees, said Leader, and has 15 openings, from entry level work to drivers to cleaners to bakers.
Bread Alone will need even more employees when it opens its new carbon-neutral bakery in Boiceville, N.Y., said Leader.
To that end, Leader is offering to help move any former employees of Vermont Bread Company from southern Vermont to the Hudson Valley.
Leader said it’s hard to find employees, not just because the job market is tight, but also because it’s hard to find affordable housing in the Hudson Valley. He said that though he is a baker, Bread Alone is actually looking to purchase an apartment building to help its employees who need a place to live.
And the Reformer also received an email from Eric Blom, the director of community relations and external communications for Hannaford Brothers Supermarket.
“We have many open positions at Hannaford, more than 50 full-time jobs available statewide, in a wide variety of positions,” he wrote.
Blom said those who might be interested in jobs at the supermarket can visit the store on Putney Road or log on to www.hannaford.com/about-us/careers.
Joseph’s Bakery in Lawrence, Mass., is also opening up its job applications to former Vermont Bread and Koffee Kup employees.
“We were saddened to learn of the abrupt closure of the operations of our vendor partner, Vermont Bakery (Koffee Kup), this week who we have worked with as our distributor of pita and flatbread in Vermont and surrounding states for over 10 years,” wrote Christina Ramirez, marketing manager, in an email to the Reformer. “We are seeking to get word to all displaced employees about a range of operational openings available in our bread bakery in Lawrence.”
According to it website, AIAC is “Spread over 24 countries in North America, Europe and Asia, AIAC companies serve a variety of industries. They manufacture precision materials, components and assemblies for the global aerospace, defense, automotive, truck, rail, appliance, power generation, mining, oil and gas, packaging, pharmaceuticals, pulp and paper, and medical equipment industries.
AIAC owns Arnprior Aerospace, with facilities in Canada, Mexico, New York, and Oregon. It also owns Avara Pharmaceutical Services with offices in South Carolina, Puerto Rico, and Oklahoma. In Vermont, AIAC owns Champlain Cable in Colchester, with offices in Texas. It also owns a number of alloy manufacturers in Ohio, Pennsylvania and Tennessee.