A MAJOR UK hospitality chain has announced the closure of a string of venues as the impact of challenging trading conditions continues to be felt across the industry.
Shares in Revolution Bars plunged more than 20% after the company revealed it will bring down the shutters on eight of its least profitable outlets and warned the macroeconomic trading environment continues to be challenging - despite reporting its best festive season in four years.
The closures were disclosed at the end of a dispiriting week for the hospitality industry, which has seen it rocked by the demise of high-profile businesses south of the Border.
On Tuesday, Simon Rimmer, host of Sunday Brunch on Channel 4 with Tim Lovejoy, revealed on social media that Greens, his vegetarian restaurant in Didsbury, Manchester, was shutting down after 33 years, citing the spiralling cost of rent, energy, and raw materials, as well as general food costs.
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The news coincided with the closure of Copper & Ink, the renowned restaurant in Blackheath, London, owned by Tony and Becky Rodd amid similar cost pressures and the fall-out from Covid and the cost of living crisis. Chef James Allcock had just days previously announced he had been forced to cease trading at The Pig & Whistle in Beverley, Yorkshire.
In Scotland, pub The Auld Hoose pub in Edinburgh shut its doors for the last time shortly after Christmas and campaigners fear there will be more closures in the weeks to come as they renewed calls for government support for the sector. The industry wants the Scottish Government to introduce a lower business rates poundage rate for hospitality and is urging the UK Government to lower the rate of value-added tax (VAT) for the sector.
Revolution Bars, which operates nearly 60 cocktail bars and gastro pubs across the UK, yesterday reported its best festive season since 2019, with group like-for-like sales up 9% for the four weeks from December 4 to 31. It noted that its Revolucion de Cuba and Peach Pubs had “performed well” and added that group like-for-like sales for the first half, including New Year’s Eve, continue to “demonstrate an improving trend”, though “remained negative” at -2.8%.
Revolution said that despite a “strong” festive period, the macroeconomic trading environment continues to be challenging and was having a “disproportionate” impact on its younger customers.
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And it warned of the challenge presented by a material rise in the national living wage, which will go up by 10.8% in April.
The company said it will close eight of its least profitable to reduce losses as part of an ongoing review of its estate. The outlets affected are Revolution Bars in Beaconsfield, Derby, Reading, St Peters Liverpool and Wilmslow, Revolución de Cubas in Sheffield and Southampton and the Playhouse in Newcastle-Under-Lyme.
Revolution said it was working on redeploying staff members affected to other roles within the group, noting that talks were under way for five of the eight bars to be transferred to other operators or to have their leases rescinded. Following the closures, Revolution will operate 58 bars and 22 pubs.
Chief executive Rob Pitcher said: "We have had the best festive trading period for four years with all of our brands recording positive like-for-like sales and Revolución de Cuba being the standout performer.
“However, our younger customers are still feeling the disproportionate effect of the cost of living crisis and the national living wage will increase materially in April 2024. Therefore, we have taken the difficult yet ultimately beneficial step for the group to close several bars which are unprofitable.
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“Our teams do a terrific job in making guests welcome and giving them a great experience and again we have demonstrated that when our customer base can afford to do so, they are choosing to celebrate with us, and we have delivered record levels of guest satisfaction. This should bode well for the future."
Revolution said net debt stood at £18.3 million on January 4, which it said was below the level reported in July 2023.
Shares closed down the day down 21.1%, or 1.15p, at 4.3p.
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