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Capogiro to close its gelato shops, at least for now

The company was running out of money, its owner said.

Capogiro announced Dec. 7, 2018, that all its locations will close by Sunday, Dec. 9. This is the location at 20th and Sansom Streets.
Capogiro announced Dec. 7, 2018, that all its locations will close by Sunday, Dec. 9. This is the location at 20th and Sansom Streets.Read more--- Charles Fox

Capogiro, the homegrown gelato-maker that National Geographic touted as the best in the world, will close its locations at midnight Dec. 9 after almost 16 years, though its owners still hold out a glimmer of hope that the business can be saved.

In an open letter Friday, Stephanie and John Reitano announced the impending shutdown of their stores, on prime Center City corners (13th and Sansom Streets and 20th and Sansom Streets), and confirmed the recent shutdown of Capofitto, their gelateria-pizzeria at 233 Chestnut St. in Old City.

In an interview after a tearful day with employees and customers, Stephanie Reitano said a recent round of potential investors raved about the product but ultimately balked at ponying up money because of the company’s debt. “All of them, across the board, said, ‘Come back when you clean this up,’ ” she said. She declined to elaborate on the amount of debt, but allowed that she and her husband would lose their home, as it is collateral. They have met with a bankruptcy attorney, she said.

Stephanie Reitano said Sunday was chosen as the last day because the couple wanted to make its payroll. Some of their employees — which number 120 in high season — have worked for them since the beginning.

It is possible that the company could continue in some fashion, at some point, she hoped. Meanwhile, other potential investors have reached out. One fan, unbeknownst to the Reitanos, even created a GoFundMe campaign seeking $1 million. She also said city officials, having read on Friday about the impending shutdown, asked the couple to meet this week. She said she was unsure about what the city could do.

The company grew out of Stephanie Reitano’s first exposure to the smooth ice cream during a visit to Capri with her husband, an Italian-born psychiatrist.

Capogiro, which translates as “head-turning” or “whim,” opened its first store in late 2002 at 13th and Sansom, following the redevelopment of a seedy stretch of Center City into what was rebranded B3 and later Midtown Village.

A perfectionist, Stephanie Reitano set up a dairy in the basement to make the gelato base from local milk and used fresh ingredients to create such flavors as amaretto and fior di latte. In 2005, having opened a larger dairy in the city’s East Falls section to accommodate a growing wholesale division to sell to restaurants, the company opened on 20th Street. In 2009, it took a storefront on East Passyunk Avenue as a summer-season scoop shop and added a location on the University of Pennsylvania campus that Reitano said ultimately was not very profitable because of high rent; the Penn location closed in late 2017.

The 2008 recession took a toll on the wholesale business, as many restaurant customers in other cities, particularly in New York, went under. That year, the couple’s longtime bank changed its policies and didn’t want to do business. A successor bank, she said, simply didn’t understand the business model.

Meanwhile, listening to concerns that gelato is a seasonal business, Stephanie Reitano began planning a shop with a Neapolitan pizzeria — one of her hobbies.

But Capofitto, which opened in late 2014, became Capogiro’s albatross, she said.

Shortly after Capofitto opened, street closures surrounded the construction of the Museum of the American Revolution, which opened in April 2017. Business rebounded, she said. But a building fire at the end of the block in February led to water damage in the restaurant but, more important, forced pedestrian detours for months.

Their insurance carrier declined to pay on a business-interruption policy, contending that the city did not officially close Capofitto after the fire.

Little by little, the businesses were chipped away. To save money, the couple stopped using a graphic artist to handle social media, among other duties. Maintenance had become a problem; the shop at 20th Street needed $25,000 for electrical work, she said.

Then came what she called a “hail Mary” — the hiring of management to position the company for expansion. If only an investor had teed up.

“One thing we never, ever changed,” she said. “The gelato.”