11 April 2024 , 11:09
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Revolution Bars Group has unveiled plans for a major overhaul that could result in the closure of 18 of its bars.
The company, which also owns Peach Pubs and Revolucion de Cuba, is grappling with cost of living pressures and regular train strikes impacting its younger clientele. The firm is also contemplating whether selling itself might be a more viable option than restructuring.
The group has been mulling over its future after recently encountering financial difficulties. Earlier this month, its shares were suspended from trading on the London Stock Exchange due to delayed financial results.
However, following the lifting of the suspension, its share price soared by 40% on Thursday. Revolution aims to raise up to £12.5million through fundraising to help steer the business back to profitability. Prominent hospitality investor and former chairman of restaurant chains, Pizza Express and Giraffe, Luke Johnson, supports the plan.
This will coincide with cost savings, potentially including the disposal of its loss-making sites, expected to be 18 bars, six of which are already closed. The company is also set to receive approximately £6.9million of additional support from its secured creditor.
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The bar and pub chain has been upfront about the hurdles it's had to jump due to the Covid-19 pandemic, spiralling inflation, and a shortage of staff. Revolution Bars, in particular, have felt the pinch from the cost-of-living crisis that's tightening the purse strings of consumers and the ongoing train strikes that are hitting its younger clientele hard.
Without a cash injection or significant cost-cutting through restructuring, the company has warned it might face "liquidity pressures" in the coming year. Moreover, the firm is contemplating a sale, which it believes could be more advantageous for its shareholders compared to restructuring plans.
Currently, there are no talks with any potential buyers, and the company has made it clear that there's no guarantee an offer will materialise.