Revolution Bars Group Enters Administration, Placing Thousands of Hospitality Jobs in Peril
The hospitality sector faces a significant blow as Revolution Bars Group, the operator behind popular chains including Revolucion de Cuba and Peach Pubs, has announced its intention to appoint administrators. This move places thousands of jobs at immediate risk across its approximately 62 venues, which employ just over 3,000 workers as of June 2024.
Financial Turmoil and Creditor Protection
On Monday, the company confirmed it had filed a notice to protect creditors, despite ongoing and "well advanced" discussions regarding a potential sale. The board stated that unless circumstances change, administrators will be appointed within 10 business days. This decision follows a deepening cash crisis and a significant slump in sales, with revenues dropping by 7.4% to £26.3 million in the three months to September.
Luke Johnson, chairman of the group, known as The Revel Collective, oversaw this critical step. The firm warned that shareholders are likely to be wiped out as part of any deal, with transactions not expected to deliver any return to them. The board emphasised its resolve to take action to protect creditors in light of these dire financial circumstances.
Failed Restructuring and Strategic Review
The group undertook a major restructuring in 2024, shutting 15 unprofitable bars in a bid to turn around its performance. However, these revamp plans faltered, leading to a strategic review last autumn into funding and a potential sale of all or parts of the business. Despite these efforts, the company's debts have grown further, rising to £25.3 million from £22.1 million at the end of June.
Bosses at the firm cited weaker-than-expected revenue, attributing it to younger customers reining in their spending and unseasonably warm weather over the summer. This resulted in a 10.5% like-for-like decline in its bars business, exacerbating the financial strain.
Ongoing Operations and Future Announcements
In the interim, the business will continue to trade as usual, with the company working alongside advisers to preserve as much value as possible for all stakeholders. The group anticipates making a further announcement on the sale talks "in the coming days," following its decision to put itself up for sale in October last year.
This development underscores the broader challenges facing the UK hospitality industry, particularly in regions like northern England, where venues have previously faced temporary closures due to public health measures. The fate of Revolution Bars Group now hangs in the balance, with its future and that of its employees dependent on the outcome of these critical negotiations.
