Byron, the struggling burger restaurant chain, has placed 20 sites at risk of closure under a restructuring plan aimed at securing its future.
The announcement, by business services firm KPMG, was brought forward shortly after Sky News revealed that Byron was seeking a so-called company voluntary arrangement (CVA) aimed at slashing costs, including rent bills, following a strategic review of the business.
The company emphasised that no restaurants would close on day one of the CVA, and its 1,800 employees, suppliers and business rates would continue to be paid on time and in full.
The restaurants at risk of closure are its eateries in Aberdeen, Birmingham, Bristol, Camberley, Cardiff, Derby, Gateshead Metro Centre, Glasgow, Harrogate, Hoxton Square (London), Leicester, Manchester Corn Exchange, Manchester Deansgate, Spitalfields, Store Street (London), Stratford upon Avon, Wandsworth (London), Westbourne Grove (London), Windsor and Worcester.
KPMG said: “As part of this strategic review, the directors have been successful in negotiating a financial restructuring with the company’s lenders and shareholders, which will enable new investment to come into the business.
“Completion of this financial restructuring is conditional on the approval of today’s CVA proposal, which is designed to tackle the cost of the company’s leasehold obligations across its UK restaurant portfolio.
“As with similar CVAs, this arrangement seeks to strike a balance which provides a fair compromise to landlords, while allowing the viable part of the business to move forward across a smaller, more profitable core estate.”
All Byron’s 67 restaurants are leaseholds while it also operates nine other leasehold sites, including its London head office.
Byron has been suffering from rising costs and a downturn in trading at many of its restaurants, as well as broader pressure on the restaurant sector amid greater competition from high street and delivery-based rivals.
Information distributed to potential bidders for the business had indicated that 13 of its sites are loss-making or marginal, and fall into a category headed “exit immediately”.
Byron boss, Simon Cope, said: “Byron’s core restaurant business and brand remain strong but the market that we operate in has changed profoundly.
“In order to continue serving our loyal customer base, we need to make some critical and difficult changes to the size and shape of our estate.
“With the support of our new owners, our creditors, landlords and other business partners, I’m confident Byron will able to continue providing our consumers with the best burger experience.
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“The teams in our restaurants are always such an inspiration and we will work hard to support them throughout this difficult process.”
The CVA, if approved by creditors on 31 January, paves the way for a transaction under which Three Hills Capital Partners (THCP), an investment firm, will become Byron’s majority shareholder.
Source: Sky