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This morning, Revolution Bars confirmed that it is actively exploring various strategic avenues after reports emerged last night suggesting the group’s intention to divest a portion of its portfolio.
Mark Kleinman of Sky News revealed last night that the London-listed hospitality group, which employs 2,500 individuals across the UK, was contemplating closing approximately 20 of its underperforming bars. Additionally, reports indicated that the group had reached out to investors for a cash injection of £10 million, surpassing its market capitalization of less than £7 million.
In a statement released to the market today, the company stated, “Following a period of external challenges impacting the company’s business and trading performance, the board is actively exploring all strategic options to enhance the group’s future prospects.” These options include restructuring specific segments of the group, partial or complete sales, and any other avenue to maximize stakeholder returns. The company also confirmed ongoing engagement with key shareholders and investors, including Luke Johnson, regarding fundraising initiatives.
Revolution Bars noted that trading has met expectations thus far this year. In January, the company announced the closure of eight bars as a response to reduced consumer spending, particularly among young people facing financial pressures.
According to investors familiar with the situation, failure to divest more bars could lead the group towards insolvency as the only viable alternative.
Revolution Bars’ shares have plummeted by 57 per cent over the past year, marking another setback for the struggling hospitality sector. Earlier this year, Rekom UK, the largest nightclub owner in the country, appointed administrators.
Recent rumours suggested that Whitbread was considering selling approximately one-third of its underperforming restaurants and pubs. Although discussions with Beverly Hills-based Platinum Equity were reportedly underway, the deal collapsed due to disagreements over the price. City sources indicate that hospitality giant Whitbread is said to have engaged Christie & Co. to facilitate the sale of between 30 and 50 of its least profitable sites.
