Family feud at heart of pizza chain collapse
The co-founder of failed pizza and pasta chain Criniti's has lashed out at the family members who ran the restaurants saying the firm's collapse was "preventable" and due to a series of poor decisions.
Speaking with news.com.au, Rima Criniti, who started the chain with a single western Sydney restaurant, said she "cannot stay silent any longer" about the problems that plagued the pizzeria that still bears her name.
Despite several stores being hastily shut down, Ms Criniti feared more needs to be done to save the chain. She said she was "devastated" at the loss of jobs and the restaurant's faltering reputation with customers who have complained of expensive, poor quality food.
Last Wednesday, solvency specialists Worrells were appointed to try and turn the business around and sell it on.
The administrator's first act was to immediately close five branches - two in Sydney and restaurants in Wollongong, Brisbane and Perth.
Worrells' said the firm was in such dire financial straits "we don't believe the group as a whole can trade indefinitely while a buyer is found".
With then-husband Frank, Ms Criniti opened the first restaurant in Parramatta in 2003.
She said it was a "huge success" and in 2009 the Darling Harbour venue opened which proved "an immediate hit".
The appetite for its signature "three metre pizza" made the family a motza with a multimillion-dollar home in Sydney's Hills District.
"Criniti's was my first baby and I am really proud of what I helped to build at the beginning," she told news.com.au. "I put in a lot of hard work to get Criniti's to a place that it was both successful and stable and felt that I could take the time to step back and focus on my children."
The Criniti family has chosen not to comment to news.com.au. The administrator said speculation from "third parties" on the cause of Criniti's woes was "uninformed opinion".
However, the turnaround specialists said there was "some magic in the Criniti's name", and it was confident a buyer could be found for a "leaner and hungrier Criniti's focused on its Sydney roots".
At its height this year, Criniti's had 13 sit-down restaurants across Australia from tourist hot spots like Manly to suburban shopping malls such as Wetherill Park in western Sydney.
When she left the firm in 2009 to raise her children, her husband and other members of the Criniti clan managed the eponymous chain.
The couple subsequently split during a messy divorce that ended up in the courts.
'CANNOT STAY SILENT'
Aside from a spell in 2017 when Ms Criniti said the couple reconciled for a time, she said she hadn't been involved in the running of the company.
While her Instagram shows a number of shots from within Criniti's restaurants within recent years, she says these have been for special events that were few and far between and she hasn't been to an outlet for some time.
"I have stayed quiet about a lot of things, but I cannot stay silent about what the closure of stores means for the staff who were dedicated to Criniti's, because I know this was preventable.
"It's hugely disappointing that changes were not made to the business earlier when it could have been turned around."
Ms Criniti, who now owns a fashion business, she said she approached the firm this year with a view to buying it but when she saw the state of the books she advised the family to appoint administrators instead.
She pinpointed several errors made by the company. These included accumulated debts and a large store opening program. The most recent Criniti's to open was as recently as August in Wollongong. It is now closed.
The company also came under scrutiny when Frank Criniti was disqualified from managing companies for five years due to his involvement in seven failed businesses.
The Australian Securities and Investments Commission (ASIC) found Mr Criniti has failed to pay $3.5 million in tax bills, had used his position to gain advantage for him and others, acted as a de facto director and provided false information to authorities. None of those companies related directly to the Criniti's chain.
"The management and external advice changed when I left and processes changed. Unfortunately, this was detrimental to the business," said Ms Criniti.
"I wish I had been given access to the business earlier to prevent some of the poor decisions that were made that led to this devastating outcome for staff.
"Yes, there are very high costs involved in the hospitality industry, but this is where smart business management and integrity need to be in place in order to continue being successful."
She said she was "devastated" by what Criniti's collapse has already meant for sacked staff and what it could mean for employees in the remaining stores.
"I am deeply saddened by this outcome and while I left Criniti's almost a decade ago, I would like to thank all the people who put their heart and souls into this business over the years," Ms Criniti added.
Since Criniti's collapsed last week, scores of former patrons have been in touch with news.com.au with the general consensus that prices went up while food quality and service went down.
"Terrible, tasteless food which we had to wait forever for; packet pasta and untrained staff in faded and dirty clothing," said one.
Former customer Harry Leykam said he barely saw the large Manly branch, on Sydney's expensive northern beaches, more than 10 per cent full. It was also closed down last week.
"The food wasn't bad, but neither was it particularly good. Same goes for the service. It really put us off returning because at the price point they were trading in there were certainly far more appealing propositions."
Ms Criniti said she recognised that the chain's reputation had taken a pounding prior to its collapse
"It is incredibly disappointing to see what has become of it. I wanted to see it being successful once again."
She added that she had her doubts enough had yet been done to save the firm.
"This is going to be a long process to get to the needed resolution, and there are going to be more hard decisions that the administrators will need to make."
Brian Walker of retail consultants Retail Doctor told news.com.au that the chain's recent expansion could have been one cause for its downfall.
"The costs would have been astronomical. They would have had huge rents on stores like Manly and they had a location strategy that was questionable."
Some branches were likely turning a profit but he doubted enough penne Al Pacinos and tropicale pizzas were being ordered in the suburbs to cover costs, Mr Walker said.
When his clients were looking to expand, his guidance was to "test and tweak" constantly to get the offer right before a big roll out.
"I don't think Criniti's did that. They just banged them all out."
Worrells' Graham Beattie said the two original locations, at Parramatta and Darling Harbour "remained seasonally brisk".
The other Sydney stores were "performing to plan" while those in Newcastle and Melbourne were "doing well too".
He was bullish about the prospects for a "slimmed-down Criniti's refocused on its Sydney roots".
"There is some magic in the Criniti's name, with the early locations in particular achieving near-iconic status in the minds of many Australians. The level of brand recognition and affinity is extraordinary for a small business of this size and we're confident that shrewd investors will want to take the name forward."
However, he said chatter about the reasons behind its downfall wasn't helpful.
"At this early stage, we've yet to fully discern all of the factors leading to Criniti's financial problems. Third-party commentary about these factors or the performance of current management, whether from arms' length critics or people previously associated with the company, should be regarded as speculation or uninformed opinion."
He added that fixtures and fittings from the closed branches were for sale.
The previous managers of Criniti's could not be contacted for comment.
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