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Wed 3rd Jun 2020 - Update: Carluccio’s, Restaurant Group, Loungers, Soho House, Travelodge, insurance
Trade body calls on sector businesses to act on unpaid insurance claims ahead of Friday deadline: The Financial Conduct Authority is moving quickly to file its action in the High Court to seek clarification on the interpretation of business interruption policy wording. The FCA released an update yesterday which identified the representative sample of policy wordings to be examined in the test case, as well as the insurers who have agreed to be involved in the action. The FCA has given policy holders until 3pm Friday 5 June to comment on the representative sample. This has triggered a trio of hospitality heavyweights to call on policy holders in the sector who have had their business interruption claims rejected, to check the wording of their policies against the FCA’s sample , to ensure their wording is captured in the test case and the interests of the sector are fully represented. Trade association, UKHospitality, which is already supporting Black and White Hospitality’s crowdfunding venture to have hospitality cases reviewed for challenge, have now partnered with leading international law firm, Taylor Wessing in relation to the FCA action. The legal expertise will add further valuable resources as the organisations consider how the FCA court action impacts on the business interruption insurance claims of policy holders in the hospitality sector. They are calling on hospitality businesses to act without delay, to provide details of their policy wording that might fall outside of the FCA’s 17 representative sample of policy wordings, announced on Monday. The insurance sector has rejected the vast majority of hospitality firms’ claims against business interruption policies which were taken out in good faith, leaving many companies on the brink of financial ruin. Richard Bursby, partner at Taylor Wessing, said: “The FCA’s process for this action is moving at warp speed. This is necessary so that policy holders can quickly understand their position once the court clarifies some of the key issues around what is covered. The FCA are aiming for a hearing in mid-July. However, policy holders have just days to review their policies against the FCA’s representative sample. Taylor Wessing is proud to assist hospitality in this initiative, as legal experts in a sector that has been hardest hit hard by the pandemic and currently has had little by way of insurance pay-out.” Rob Atkinson, lawyer at Black & White Hospitality, said: “We have been deluged with policies but now have this last chance to widen the scope of the court action – I urge any hospitality business that thinks it has a relevant policy to send it to us.” Kate Nicholls, chief executive of UKH added: “So many stakeholders have come together on this crucial matter. We now have a final sprint towards the deadline, to make sure that hospitality’s insurance plight is properly heard. A central ask of UKH’s #Fair4Hospitalty campaign is a resolution to insurance claims. With the support of leading law firm, Taylor Wessing, and Black & White Hospitality, we are urging all hospitality businesses to get in touch, so the industry’s voice is heard and any relevant wording not covered by the proposed test case is included.”

Boparan paid £3,225,000 for Carluccio’s sites: An administrator’s report shows Boparan paid £3,225,000 to acquire 30 Carluccio’s sites and buy the rights to the brand. A further £125,000 was paid to acquire the brand’s leasehold site in Dublin. Of the £3.25m, just £299,966 was paid for the leasehold property with £1m paid for intellectual property and £1,536,000 paid for fixture and fittings. An administration document shows Boparan, one of 67 parties to show an interest in the assets, had originally offered £4.5m for 47 sites, as reported by Propel at the time, but later reduced the offer in line with a desire to buy a smaller number of venues. The administrator reports that, because of mixed results during negotiations with landlords, the estate was accruing rent at the rate of £103,000 per week. Prior to administration, the brand had been performing reasonably well with 13-week rolling like-for-like sales improving from -5% in November 2019 to -1.8% in February 2020. Underlying Ebitda was also £263,000 better than February 2019.

Loungers ramps up reopening plans: Cafe bar operator Loungers has ramped up its reopening plans, with a further 17 of its sites have reopened for takeout over the last fortnight, Propel has learned. The AIM-list, circa 170-strong operator originally launched the takeaway on Friday (8 May) at its Tinto Lounge in Gloucester Road, Bristol. Operating from 10am to 2pm and 2pm to 9pm seven days a week, consumers could order from a limited menu by phone or in person, with 50p from every main course and burger being donated to the company’s chosen charity Marmalade Trust. It then expanded this to a further six sites. Propel understands that the company will reopen a further ten sites for takeout this week. Chief executive Nick Collins told Propel: “We are really pleased with how they have performed, and will consider opening further sites on this basis in the coming weeks as we gear up to reopen the estate.”

The Restaurant Group: Some Frankie & Benny’s sites won’t reopen: The Restaurant Group (TRG), the owner of Frankie & Benny’s, is set to tell staff that a “large number” of its outlets will not reopen after lockdown. In an email to staff seen by the BBC, which has been sent to the group’s Leisure Division, which included the 200-plus Frankie & Benny’s brand, TRG says many sites are “no longer viable to trade and will remain closed permanently”. The email said: “The covid-19 crisis has significantly impacted our ability to trade profitably, so we’ve taken the tough decision to close these restaurants now.” Those currently working in sites due to stay closed were told: “Unfortunately, unless there are any suitable alternative roles identified, it’s likely your role will be made redundant.” In March, TRG said that 61 out of 80 branches under its Chiquito’s brand would remain closed permanently as it fell into administration. It cited the covid-19 outbreak as having had “an immediate and significant impact on trading”. Propel understands that the company is in talks to buy back up to 20 of those sites out of administration. The company announced in February that it would speed up existing plans to close restaurants. Initially it had planned to make 150 closures – which were first signalled last year over a six-year period. It then said it would close 90 restaurants by the end of 2021.

Travelodge offers £80m sweetener in CVA: Travelodge, the budget hotel group, will today launch a formal restructuring plan on which it will argue the fate of 10,000 British hospitality industry jobs. Sky News has reported that the company, which is part-owned by the Wall Street bank Goldman Sachs, will unveil a sweetened proposal that it hopes will win over sceptical landlords. Travelodge’s company voluntary arrangement (CVA), which has been assembled by the chain’s adviser, Deloitte, will include a new commitment from shareholders to inject up to £40m of new equity, according to a source close to the process. An earlier proposal to secure an additional £60m in borrowing capacity has been increased to £100m, the source added. The CVA’s launch will come after weeks of bitter public fighting between Travelodge’s owners and landlords including Nick Leslau, the property tycoon.

CGA Strategy & Wireless Social enter into a strategic alliance in the UK hospitality market: CGA, data and research consultancy for the out-of-home food and drinks market, have entered into a strategic partnership with guest behaviour and analytics specialists, Wireless Social. CGA specialises in market measurement, consumer research and location planning for the UK hospitality sector. Wireless Social works with major pub, casual dining, and leisure brands, providing Wi-Fi technology, enabling customer data collection, including footfall and guest profile analytics. A statement said: “The partnership comes at a time of great importance for the sector as the combined data is set to be key to help operators in their recovery from the covid-19 crisis. Under the new agreement, Wireless Social will be sharing aggregated footfall metrics and demographic data. Existing CGA and Wireless Social customers will have access to a series of enhanced insights alongside existing reports such as, the On Premise Measurement model, Outlet Index, Volume Pool Advanced Analytics and other consumer research, analytic and measurement services. The addition of the new data will highlight key benchmark analytics demonstrating footfall trends, visit frequency and recency, and by demographic segments. Wireless Social have been reporting on footfall trends throughout the covid-19 pandemic, with the data being used by many leading operators, Government bodies, and other influential think tanks, to support decision-making and to report on the changing situation. It is hoped that the combined data sets will, for the first time, provide a much clearer picture of the situation in the street and in venues, especially as we start to emerge from the lockdown.” CGA’s chief executive Phil Tate said: “We are hugely excited to be working closely with Wireless Social on a new service to monitor and report footfall as our market comes back from lockdown. This service combines CGA’s unrivalled insights with Wireless Social’s unparalleled footfall metrics to bring to market a tool that will help our partners make more informed decisions at a critical time for our sector.” Julian Ross, Wireless Social chief executive, added: “CGA are the industry experts when it comes to actionable insight, so they were the only choice to make as we looked to build value from our guest behaviour understanding. Combining POS data with footfall data brings us ever closer to understanding the complete picture, to support our customers decision making. The cherry on top for me is that the team at CGA are thoroughly decent people, who really care, so we like to think they’re a perfect match in that sense.”

Soho House eyes upstate New York for Farmhouse opening: US reports suggests Soho House is eyeing Rhinebeck, New York, 100 miles north of Manhattan, as its first US Farmhouse location. Rhinebeck’s known to be popular with celebrities and creative types including Paul Rudd who co-owns Rhinebeck’s Samuel’s Sweet Shop with “The Walking Dead” star Jeffrey Dean Morgan. The Soho Farmhouse’s Cotswolds spread of 100 acres includes a spa, cabins, a cinema and various dining options including a barn for “farm feasts”. 

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