Revolution Bars issues update on future as venues ‘at risk of closing’
REVOLUTION Bars has issued an update on its future as dozens of venues remain “at risk of closing”.
Revolution Bars has had its shares suspended from the London Stock Exchange as troubles brew for the bar chain as it mulls over restructuring plans.
The group, which owns 58 bars and 22 gastro pubs, was required to publish its interim results for the second half of last year by the end of March.
But it said it was unable to do so, which has resulted in the suspension of its shares on the AIM index before trading begins on Tuesday morning.
The company did not give a reason for the delay but said the suspension would be lifted when the results are published in “due course”.
Revolution said last week it is in talks with investors about raising new cash and could put itself up for sale as it looks to bolster its finances after facing tougher trading conditions.
A potential restructuring could also include the closure of dozens of bars.
Sky News reported that Revolution was considering a plan which could result in the closure of around 20 bars, approximately a quarter of its total.
It is unknown how many people could face job cuts, but one insider said it could reach into the hundreds.
Earlier this year it had cut its annual profit outlook, saying its younger customers were being disproportionately impacted by the higher cost of living.
The bar chain said it was mulling over strategic options to improve its future prospects, including a restructuring plan or a “sale of all or part of the group”.
In Tuesday’s update, Revolution said it continues to “evaluate all the options available to it”, including engaging with key stakeholders and potential investors over a possible fundraising.
Revolution Bars revealed in January it would have to close eight of its boozers, and blamed younger customers spending less than they used to.
But, in the same months, it said it had had its best Christmas trading period for four years.
Rob Pitcher, Revolution Bars’ chief executive, said: “Revolution’s younger guests are still feeling the disproportionate effect of the cost-of-living crisis.
“Looking forward, both business rates and national living wage will increase materially in April 2024 and therefore, we have had to take the view that, with inflation remaining high, the recovery for the Revolution business, our largest brand, will take longer than we had previously forecast.”
In January we reported the chain had issued an update on its future after revealing plans to close eight sites and slashing opening hours.
The chain has said that it will “significantly reduce expenditure” and put back all refurbishments despite its “best festive period since 2019”.
The firm’s boss, Mr Pitcher, warned in the latest trading update that the night-time economy remains at risk due to the cost of living crisis and lack of disposable income among young people.
Mr Pitcher also warned that the rise in the national living wage and the doubling of business rates have added to these pressures.
He told The Times that he could not guarantee that more Revolution bars wouldn’t close and said that the priority was moving Revolution gradually up the age scale.
The operator of Revolution, Revolucion de Cuba and Peach Pubs brands has predicted lower earnings into the second half of the financial year, with estimates between £3million and £3.5million.
Prior to that was the the chain revealed it had decided to close eight sites across England as it warned that its younger customers are still feeling a “disproportionate” strain from rapid increases in the cost of living.
The chain, formally known as Vodka Revs, opened its first bar in Manchester in 1996 and now has 80 venues UK-wide.
Revolution had to close six bars back in 2020 as it struggled to keep afloat due to coronavirus restrictions.
The bar chain closed venues in London, Bath, Birmingham, Clapham, Solihull and Sunderland.
Due to soaring energy bills, the chain was forced to close its venues on Mondays and Tuesdays in January 2023.
Why are retailers closing stores?
RETAILERS have been feeling the squeeze since the pandemic, while shoppers are cutting back on spending due to the soaring cost of living crisis.
High energy costs and a move to shopping online after the pandemic are also taking a toll, and many high street shops have struggled to keep going.
The high street has seen a whole raft of closures over the past year, and more are coming.
The number of jobs lost in British retail dropped last year, but 120,000 people still lost their employment, figures have suggested.
Figures from the Centre for Retail Research revealed that 10,494 shops closed for the last time during 2023, and 119,405 jobs were lost in the sector.
It was fewer shops than had been lost for several years, and a reduction from 151,641 jobs lost in 2022.
The centre’s director, Professor Joshua Bamfield, said the improvement is “less bad” than good.
Although there were some big-name losses from the high street, including Wilko, many large companies had already gone bust before 2022, the centre said, such as Topshop owner Arcadia, Jessops and Debenhams.
“The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend,” Prof Bamfield said.
“Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult.”
Alongside Wilko, which employed around 12,000 people when it collapsed, 2023’s biggest failures included UK Flooring Direct, Planet Organic and Tile Giant.
The Centre for Retail Research said most stores were closed because companies were trying to reorganise and cut costs rather than the business failing.
However, experts have warned there will likely be more failures this year as consumers keep their belts tight and borrowing costs soar for businesses.
Last year, around 14% of insolvencies were in retail businesses, according to official figures.