Revolution Bars in secret talks about sale and mass venue closures | BusinessNews

The London-listed leisure group Revolution Bars is plotting the closure of a quarter of its venues as it holds talks with investors about an emergency fundraising and puts itself up for sale.

Sky News has learned that Revolution, which owns Peach Pubs and the Revolucion de Cuba chain, is drawing up plans to ax roughly 20 of its worst-performing bars.

It has also been sounding out investors in recent days about a cash call to raise approximately £10m – more than the company’s current market capitalisation.

One investor approaching about the prospective share sale said it appeared to be dependent upon the successful implementation of a restructuring plan to close sites.

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Without those taking place, the survival of the company would be in doubt with insolvency the only likely alternative, they added.

A significant number of jobs will be put at risk by the closures, which are expected to be concentrated on the Revolution-branded chain.

About 2,500 people work for the group, which floated in London for the second time in 2015.

It was previously owned by the private equity investor Alchemy Partners.

It was unclear on Monday how many redundancies would arise from the restructuring, if it took place, but one leisure industry source said it would be “in the hundreds”.

Cavendish, the investment bank, is understood to be working on the capital-raising.

An accelerated sale process to flush out interest from potential buyers of the company is also set to be launched in the coming days.

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Prospective buyers could include the pubs behemoth Stonegate, which owns the Slug & Lettuce and Be At One chains, or financial turnaround investors.

Revolution is now a minnow in stock market terms, with a valuation of less than £7m, but it remains a significant player in Britain’s night-time economy.

The company said in January that it would shut eight sites, blaming declining spending among younger consumers.

In a trading update later that month, it warned on profits but said it had had its best Christmas trading period for four years.

“Revolution’s younger guests are still feeling the disproportionate effects of the cost-of-living crisis,” Rob Pitcher, Revolution Bars’ chief executive said.

“Looking forward, both business rates and national living wages will increase materially in April 2024 and therefore we have 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.”

Shares in Revolution Bars closed unchanged on Monday at just 2.9p.

They have fallen by 57% over the last 12 months.

A Revolution spokesperson declined to comment on Monday evening.

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