Scott Wright: Rise and fall of a popular Scottish business

“5pm Ltd has unfortunately been placed into administration following challenges with cashflow that could not be overcome,” said Donald McNaught, restructuring partner at Johnston Carmichael and one of two joint administrators appointed to the stricken firm on Friday, along with Graeme Bain.

“This has resulted in the loss of 27 jobs. Administrators are now seeking interest in the company’s remaining business and assets, and we invite any parties interested to get in touch as quickly as possible.”

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Mr McNaught added: “Three members of staff have been retained whilst the administrators continue to operate the electronic reservation platform which provides a table booking service for restaurants.”

Concern was raised that the collapse had effectively put around £1 million of bookings made with the site in limbo, though it will take time for the administrators to determine the total amount of outstanding claims.

It has been encouraging to read that some restaurants will honour vouchers that have yet to be redeemed. However, no refunds will be forthcoming from the company in administration for either unredeemed vouchers or bookings which have been cancelled as a result of the insolvency event.

The situation, therefore, could prove to be costly for people who have spent hard-earned cash on vouchers to treat themselves or loved ones when the cost of living is so high, only to get nothing in return.

As a young adult who savoured the hospitality scene of Glasgow and Edinburgh in the early noughties, 5pm was a priceless resource. It was a gateway to the wave of stylish new bars and restaurants which were emerging, not to mention established high-end eateries, which would otherwise be beyond my budget.

Over the years, 5pm, which was run by Ronnie Somerville, David Maguire, and Charles Shaw, would go from strength to strength, and thrived even as competitors entered the deals market. It particularly came into its own in the aftermath of the financial crisis of 2008 and 2009, when the credit crunch meant people were worried about cash and restaurant operators found it difficult to attract custom.

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“The terrible economic climate is benefiting us,” said 5pm's then chairman Charles Shaw in an interview with The Herald in 2011. “For some people, 5pm is the difference between taking their family out to a nice restaurant once a month or nor being able to afford it at all.

“At the end of the day, this business is about bringing people enjoyment, and I’m proud to be involved in it.”

Times change, of course, and the seismic events we have lived through in more recent years have had a profound effect on the hospitality industry that 5pm was founded on.

The outbreak of the pandemic and the subsequent lockdown and trading restrictions imposed on consumer-facing businesses would undoubtedly have posed enormous challenges for a firm like 5pm that exists to provide experiences for consumers, whether that be meals in restaurants or beauty therapies. For protracted spells after the first lockdown was announced in March 2020, trading in bars, restaurants, hotels, and spas was extremely constrained, which in turn would have limited sales of the vouchers 5pm provides.

And the problems did not disappear when Covid restrictions were eventually lifted. The hospitality industry was hit by acute labour shortages on re-opening after Covid, thanks in part to people moving into other jobs during the pandemic, and that was then followed by a crippling cost crisis, after inflation soared in the aftermath of Russia’s full-scale invasion of Ukraine.

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The trading picture for hospitality businesses continues to show little sign of improving, even though the rate of inflation has returned to the 2% target. Costs and interest rates are significantly higher than they were before the pandemic, albeit the base rate was trimmed to 5% from 5.25% by the Bank of England last week, and concern lingers that the battle against inflation has not been won.

Many hospitality outlets have for some time been operating reduced hours, and have elected to remain closed during traditionally quieter times such as Mondays and Tuesdays. The cost of trading simply means that it is not economically worthwhile. Such trading patterns will certainly not have helped a business like 5pm, which traditionally thrived by selling bookings at these precise times.

Mr Somerville, a co-founder of 5pm, understood this as much as anyone. In what may now be seen as a last throw of the dice, he oversaw the relaunch of 5pm a year ago. He changed its name to Kooble and, more fundamentally, remodelled it as a platform co-owned by hospitality operators.

With no external shareholders, the objective was to channel profits back to hospitality businesses through a dividend.

“I believe that a co-operative booking platform, owned by the industry itself is the solution the tourism and hospitality sector has been waiting for,” Mr Somerville declared at the time.

“My vision is to spearhead a Scotland-wide movement that fosters a sustainable and thriving hospitality industry, benefiting all stakeholders. With our proven platform, expert team, and over two decades of experience, we have the necessary tools to turn this vision into a resounding success that empowers everyone involved.

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“Looking to the future, we aim to expand the concept globally. We believe that a successful Kooble in Scotland will be the stepping stone to offering a multilingual and white label platform and playbook to other groups of hospitality businesses worldwide, who all have the same problem.”

Unfortunately for Mr Somerville, Kooble staff, and consumers hoping to have vouchers redeemed, that stepping stone turned out not to be the springboard to prosperity they hoped it would.