Koffee Kup, Vermont Bread Co. closures blamed on years of financial trouble
BURLINGTON, Vt. (WCAX) - We are learning more about what led to the sudden closure and layoff of over 400 workers at the Koffee Kup Bakery, and its Brattleboro subsidiary, the Vermont Bread Company, late Monday. The holding company that bought the iconic, Burlington-based bakery earlier this month, says years of financial losses made them unable to attract new investors.
Inside MoMo’s Market in Burlington’s OId North End, some shelves are being stocked while others won’t be. “Normally, the shelf is full from here to all the way up with doughnuts, sliced bread. Right now, we only have hot dog and hamburger buns left,” said the store’s Norah Cunha.
Koffee Kup bread and pastries have been an essential part of thousands of stores in the Northeast since 1940. With their sudden closure, stores like MoMos are asking what’s next. “This kind of came out of nowhere. It really affected us, considering it’s the only bread company that supplies us. So, we are kind of scrambling at the moment,” Cunha said.
Tuesday morning, former employees were clearing out their stuff at the shuttered bakery’s Riverside Avenue location. “There is 22 years down the tubes,” said Mike Brown. Many employees arrived to work on Monday at the closed building and learned about the layoffs. Brown says the writing was on the wall for the troubled company. “Things were just turning bad, turning south.”
Meanwhile, recruiters are hoping Koffee Kup’s demise works to their advantage. Hiring ads now fill the door and front lawn, trying to entice the 150 workers who lost their jobs at the Burlington plant. “We are looking to see if we can help out and maybe get some of those people jobs,” said Jennifer O’Neil, a Local warehouse manager.
Many questions still remain about the sudden closure and the finances behind it. Koffee Kup was purchased by a holding company, the American Industrial Acquisition Corporation, on April 1st. Just three weeks later, the business stopped all operations, pointing to what they call substantial financial losses that go back to 2017. AIAC officials declined to comment, but a firm representing the company issued a statement:
“There is no villain in this story. For those four years the lenders went above and beyond to support the business, the employees showed up and worked hard every day, the suppliers kept the company supplied and the customers kept buying the products. This is simply one of those tragic stories where things did not work out and it’s an awful shame.”
The firm also says 50 investors looked at Koffee Kup but determined the business wasn’t viable.
Back at the bakery, neighbors say they’ll miss the local business. “Doughnuts have a unique smell and every morning when you come in and they are baking doughnuts, it’s like, ‘Boy, I’m hungry,’” said Ed Couillard with Burlington Collision.
Vermont’s governor said he was surprised when he heard the news.
“It’s a bit of an iconic brand for us in Vermont. I’m hopeful maybe someone else could make a viable concern out of it. We’ll see what happens, but in the meantime, we want to make sure that we’re protecting all the employees that there are many different job openings throughout the state, so we’ll do our best to connect those employees to viable alternatives,” said Governor Phil Scott.
In addition to the layoffs in Burlington and Brattleboro, a number of employees also are out of work at a Connecticut-based location.
BRATTLEBORO STRUGGLES WITH LOSS OF MAJOR BUSINESS
The Vermont Bread Company, a subsidiary of Koffee Kup Bakery and a major employer in Brattleboro, was part of the collateral damage in Monday’s sudden closure.
According to its website, the Vermont Bread Co. was founded in a barn off a dirt road in the 1970s. In 2013, it was acquired by Koffee Kup Bakery and was busky baking until this week.
“I found out everything else from the news,” said Brandon Bostwick, who showed up for his shift Monday, thinking it would be a normal day. Little did he know it would be his last day working for the Vermont Bread Company. “There were only like five people here. I asked what was going on, and nobody would give me an answer. So, we basically were cleaning the place up not knowing what the hell was going on.”
As Koffee Kup and Bread Company trucks sat idle out front, Bostwick started looking for another job, which he said he found almost immediately at another bakery down the road. Meanwhile, at the nearby Brattleboro Co-op, just two packages of Vermont Bread Company English muffins remained on the shelves Tuesday.
“It sucks for the other people because I know that there are other people in there that got kids they need to support. And I’m a family man. I’m trying to take care of my family like anyone else,” Bostwick said.
“These employees were really dedicated, passionate employees who were really, from all reports, blindsided,” said Adam Grinold, the executive director of the Brattleboro Development Credit Corporation. It’s his job to help find a new business for the plant. He says there are important features already in place including storage, loading docks, and a trained workforce. Grinold says there is an interested buyer. “They were an identified strategic partner during the first potential sale and they were not the ultimate winner, and they remain an interested partner.”
Another silver lining, officials say, is federal dollars could be available to employees who are looking for additional training to switch careers.
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