Flash Coffee exits Singapore, with S$14 million in debts to creditors, staff 

FLASH Coffee’s Singapore business owes over S$14 million to more than 150 creditors. This includes employees who were not paid up to two months’ salaries, as well as contributions to the Central Provident Fund (CPF).

The company, which exploded onto the coffee scene in 2020, has shuttered its remaining 11 Singapore outlets. Its local entity has filed for a voluntary winding-up, The Business Times reported earlier on Friday (Oct 13).

Flash Coffee’s staff have not been paid their October salaries and part of their salaries for September, a workers’ union told BT on Friday. They are also owed CPF contributions.

“Salaries owed comprise the balance of 75 per cent of workers’ September salaries, as well as for the work done up till Oct 12, along with encashment of remaining leave days,” said Julie Cheong, president of the Food, Drinks and Allied Workers Union (FDAWU).

The total amount owed to employees is not available at this juncture, said Gary Loh, one of Flash Coffee’s provisional liquidators. He noted that the staff “also appear to have other contractual claims like notice pays, unutilised leave and reimbursements”.

Loh did not provide further specifics on the company’s other creditors, but said that the single largest one is Flash Coffee’s holding company. The provisional liquidators are now focused on safeguarding the company’s assets.

Flash Coffee did not directly address queries from BT on its liabilities, but said that of the total sum, S$13 million is owed to its holding company.

Backed by top German venture builder Rocket Internet, Flash Coffee operated on a blitzscaling model that saw it rapidly launching stores across the country.

Like China’s Luckin Coffee, it raised millions from investors – including foodpanda owner Delivery Hero and tech investor White Star Capital – to fuel its hiring drive and multiply its retail footprint.

But the company appears to have been under pressure. One former Flash Coffee employee told BT that salary delays were happening “almost every month”. In two instances this year, salaries were delayed by two months, the ex-employee said.

Flash Coffee’s management team constantly attempted to assure staff that investors’ funds were incoming, the source added.

The company did not address BT’s query on late salaries, but said in a statement that its decision to shutter the Singapore stores “wasn’t made lightly”.

Strike speculation

Flash Coffee also refuted that its workers have gone on strike. A TikTok video on Thursday night had shown a poster outside Flash Coffee’s Jurong Point outlet, titled “ON STRIKE”, with a message that appeared to be from its baristas.

The poster in the video read: “In light of several late salary payouts, this outlet will be indefinitely closed. Your Flash baristas islandwide deserve a conducive work environment. We thank you for these memories. Till next time, goodbye.”

Flash Coffee said of the matter: “We ceased operations at our 11 stores and, consequently, our baristas are not required to report to work.”

FDAWU likewise said that it understands from workers that there were no explicit plans for any “coordinated action”. The union visited Flash Coffee outlets and spoke to affected staff on Friday.

Workers said they were informed on Tuesday that the Singapore outlets would be closed from the next day. The staff were terminated on Thursday.

“FDAWU will be assisting affected members with salary-related claims,” said Cheong, adding that the union will provide job assistance support.

Stiff competition

Flash Coffee’s exit from Singapore comes amid stiff competition from a growing number of entrants into the region’s coffee scene.

Earlier this year, Flash Coffee exited the Taiwan market after being forced to shut stores due to intense competition, local media reported. It laid off staff regionwide in November 2022, including in Singapore and Indonesia, BT previously reported.

But in its Friday statement, Flash Coffee said that most of its markets have “strong unit economics and future growth potential”, with some of them nearing break-even in coming months, on the basis of earnings before interest, taxes, amortisation and depreciation – a metric favoured by loss-making startups.

Flash Coffee also has offices in Malaysia, Indonesia, Thailand and Hong Kong, its website showed.

The provisional liquidators of Flash Coffee’s Singapore unit will contact creditors in due course, with a meeting to be held on or before Nov 10.

Affected Flash Coffee employees can approach FDAWU at 6737 6088 or e-mail fdawu@ntuc.org.sg for assistance.