Leon launches restructuring plan due to steep drop in sales during pandemic
Healthy fast food chain Leon has launched a restructuring plan to reduce rents following a sharp drop in sales during the pandemic.
The company has appointed business advisory firm Quantuma to launch a company voluntary arrangement (CVA) after its stores, which are in city centre and transport hub store locations, suffered a sharp drop in footfall due to the Covid-19 crisis.
The proposals would allow Leon to switch four of its branches to a rent-free model, while the majority of restaurants would be moved to turnover-based rents, Sky News reported.
Leon, which has most of its stores in central London, reported a 70 per cent drop in sales during the second England-wide coronavirus lockdown, compared to revenue levels last year.
The company said there will be no job losses and the “majority” of its store estate will remain open.
John Vincent, founder and chief executive of Leon, said: “The CVA is intended to provide the company with a foundation to first survive and then carefully rebuild. We had a growing and profitable business before Covid.
“Despite taking many actions to reduce cost and optimise revenue during the crisis, the continued lockdowns and restrictions have made this CVA a necessity.”
Andrew Andronikou, managing director at Quantuma, added: “Our number one priority, as we work with the board of Leon over the coming weeks and months, will be to allow the business to navigate the current challenges and help the business return to its positive trajectory whilst protecting jobs and minimising the need for store closures.”