The former owner of Wilma’s talks about what comes next for her business
To avoid the spread of COVID-19, various restrictions have been put in place and have changed how restaurants in Michigan serve food. Executive order 2020-160 mandates that as of July 31, all indoor gatherings of more than 10 people are prohibited. As the regulations are updated frequently, businesses have to provide various options to ensure that they can continue to make a profit. Despite this, many businesses have ended up permanently closing their doors. One such business, Wilma’s in Ann Arbor, closed in April after a month of suspending their restaurant’s services.
Wilma’s originally opened in 2011 in downtown Ann Arbor as Babo, a grocery store meant to offer local food options. The restaurant officially became “Wilma’s” in 2019 and was managed by Sava Farah, the CEO of SavCo Hospitality. Wilma’s was the third restaurant running under SavCo and is their only restaurant being permanently closed.
“As soon as this [quarantine] hit we sort of reacted quickly and we were one of the first restaurants who announced that we would not be reopening,” Farah said. “We had a really long term view on this early on and we didn’t think that this was going to be a quick recovery.”
According to Farah, Wilma’s wasn’t a high performer for the company and wasn’t in a great location. The company had planned to renegotiate the restaurant’s lease in 2021 but quickly made the decision to not expend any more resources on the restaurant. Farah cites rent being the main reason why Wilma’s closed. While Farah was willing to continue with Wilma’s, they weren’t able to negotiate or support the current rent demands by the landlord and ultimately decided to close down.
“You’ll see a lot of businesses starting to disclose the same realization which is, even at 100% capacity, the rents are so exorbitant and the seasonality of being in a college town is crippling for some businesses,” Farah said. “How can you expect to be making 100% profit when the people you’re making money off of legally cannot serve guests in their restaurant for two months?”
As of now, Sava’s is the only SavCo restaurant open for business. The company is working to mitigate their risk and run their business as carefully as they can. They plan to reopen Aventura once the risk decreases and more people are willing to dine out again.
“We’ve centralized all of our focus at Sava’s and we have not reopened Aventura because we don’t believe there’s a market for it,” Farah said. “We have a really lovely landlord there that has worked with us so that we can actually float that location and pay our rent.”
In March, the company had over 250 staff members, but currently only has 50. According to Farah, many of SavCo’s former employees have either left Ann Arbor or aren’t currently comfortable working with the public.
“These essential jobs, these are high risk jobs,” Farah said. “Our livelihood is at the mercy of literally anyone that walks into the doors… You’re seeing so many restaurants that are closing either permanently again, or just closing and reopening which is just such a strain on the manpower and momentum.”
SavCo has no intention of reopening Wilma’s in a different location or any other new business due to the current state of the restaurant industry.
“A big factor is going to be what happens in the fall and how many people actually choose to come back to campus,” Farah said. “A lot of businesses are holding on for dear life right now thinking about the fall and hoping that it brings some traffic.”