Revolution Bars to close six sites as sales plunge due to coronavirus 10pm curfew
Revolution Bars will permanently close six sites after coronavirus restrictions such as the 10pm curfew on hospitality venues caused sales to plummet.
The bar chain announced this morning it would launch a company voluntary arrangement to close sites, cut rents and improve profitability.
Investors will need a stiff drink today, with shares already down 6.5 per cent to 9p.
The company’s market capitalisation has shrunk more than 85 per cent since the end of February.
Revolution has begun the restructuring process as it anticipates that the Christmas trading period will be “severely compromised”.
“Any return to near normal levels will not be possible before next Spring at the very earliest”.
The decision comes after new government restrictions, including the 10pm curfew on hospitality venues.
The ban on households mixing indoors in tier 2 areas, created further uncertainty for the sector.
Tier 2 troubles
In the period between reopening on 4 July through to 29 August, sales were 72.5 per cent of last year.
However in the five weeks to 24 October sales have reduced to 49.4 per cent of 2019 levels.
It said this reflected the introduction of the 10pm curfew and localised lockdowns.
Revolution said it will exit six bars and negotiate rent cuts with the landlords of seven others.
The 13 sites identified are either significantly underperforming due to their location, are significantly over-rented or not expected to generate profits going forward, Revolution said.
Chief executive Rob Pitcher said: “Throughout this extended period of distress caused by Covid-19, the Group has sought to prioritise the health and well-being of its staff and customers, minimise its cash consumption, maintain good levels of liquidity to ensure its ongoing viability and to be in a position to take advantage of opportunities that may arise once restrictions are lifted.
“The CVA proposed by the Group’s Revolution Bars Limited subsidiary entity, if agreed by landlords, is another proactive step to lower outgoings to help safeguard the future of the Group and improve long-term performance.”