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Revolution, the city centre bar chain, is considering shutting venues after it was rocked by the latest government-imposed Covid-19 restrictions, including the 10pm curfew that began this week.
Revolution, which has about 70 bars, said it was weighing up whether to launch a company voluntary arrangement (CVA) – a form of insolvency procedure that struggling businesses can use to shrink rather than risk failure.
It comes days after trade bodies warned that almost a quarter of hospitality businesses fear they will collapse before Christmas without further financial support.
In a statement, the company said the financial difficulties caused by the pandemic had been “exacerbated by the further Covid-19 related restrictions announced by the government earlier this week”.
The 10pm curfew is expected to cause significant financial hardship for bars, which rack up almost a quarter of their sales after that time, according to analysis from the industry expert Mark Brumby, of Langton Capital.
Revolution’s bars are also located in city centres, which will be experiencing far lower footfall after the government reversed its encouragement to return to the office, advising people to work from home where possible instead.
If Revolution launches a CVA, the process typically involves asking landlords to accept lower rent payments and closing the least profitable sites.
The process has proved controversial, particularly among landlords who have previously accused some firms of using CVAs as an easy fix for poor business performance.
However, Revolution said it had a fundamentally strong business and had only been forced to consider the plan because of circumstances beyond its control.
“No decisions have yet been made and there is much further work to complete before the board decides on any appropriate course of action,” the company said in a statement.
“Revolution has a strong balance sheet following the £15m equity fundraising and the extension of its banking facilities announced in June but the board believes that the long-term nature and potential impact of the latest operating restrictions means that it must consider all necessary options to ensure that its business remains viable.”
Source: The Guardian
Keyword: Bar chain Revolution weighs up closures over Covid curfew | Business