Byron, the troubled chain of burger restaurants, has announced a financial rescue plan that could result in the closure of up to 20 shops a decade after it first opened its doors.
The company has launched a restructuring process known as a company voluntary arrangement (CVA) as it attempts to lower its rental bill and focus on a smaller number of profitable restaurants.
Byron runs 67 restaurants and employs about 1,800 people across the UK. The company has identified 20 sites where it will pay reduced rent for a period of six months while it holds discussions with the landlords about future operations. Some are expected to close as a result.
Simon Cope, the Byron chief executive, 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.”
KPMG, which is advising on the restructuring, said no restaurants would close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.
Will Wright, a restructuring partner at KPMG, said that after 10 years of growth some Byron restaurants were not meeting performance expectations and “with gathering economic headwinds starting to impact the sector more profoundly”, the company’s directors had begun a strategic review.
“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,” he added. “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.”
Under the terms of the deal, existing investor Three Hills Capital Partners becomes the majority shareholder. Current owner Hutton Collins will retain a minority stake in the business.
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