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Fri 5th Jun 2020 - Update: Downey, Full Capacity Plan, Mowgli and Revolution
Downey – next few weeks will be as fraught as the first few weeks of this: Hospitality Union founder Jonathan Downey has said that for many in the sector, the next few weeks are going to be as fraught and as difficult as the first few weeks of the covid-19 outbreak, as he set out the 15 things the government needs to do to help save as much of the sector as possible. Downey said: “I know there has been some optimism lately from some operators, and people are itching to get back open. It’s great to see and I wish everyone well but we can’t ignore the complete devastation of a large part of our industry that, for thousands of businesses and probably as many as a million jobs, is now inevitable. No amount of 1m distancing, furlough or rates relief is going to save them. We’re back to an economic triage and it feels to me that: 1. A third of sites will be fine – ‘CBIL-ed’, backed and big enough to cram down creditors and force through massively improved lease deals using CVAs and other leverage. Look at Goldman Sachs and Travelodge for how that works. 2. A third of sites are gone no matter what. There is nothing we can do to save these businesses and these jobs. But there is no time to mourn their loss because: 3. There is a very important middle third that we MUST SAVE and we need this government to help us do that. There is a lot they need to do and, ahem, they’ve not had the best few weeks. I have rapidly reducing faith that they will do the right things to save a third of the UK’s third largest employer but let’s see what happens in the next few days. We’re doing what we can to make a difference. There are just 27 days until 1 July when locks get changed and premises are repossessed as landlords land grab the prime sites with multi-million fit-outs or try and force tenants to cough up rent arrears. That will happen unless the forfeiture moratorium is extended. A new ‘Code of Conduct’ won’t stop any of this FFS. We all know that the landlord-tenant relationship is anachronistic and dysfunctional, that the relative bargaining positions are hopelessly distorted. This has to change and this government must legislate the change. They started with a 96-day lease forfeiture moratorium and they now need to: Extend that for a further 91 days at least to 30 September. This will force more landlords to the table, to be reasonable and amenable; Give us a #NationalTimeOut; and provide landlords with support through a debt repayment break to help them transition to a new way of working with us – rent free + turnover rents. None of this will cost the taxpayer anything. If government doesn’t do this (or something similar and as significant) it will cost the taxpayer billions in lost tax receipts, increased unemployment and irrevocable social damage. What is keeping them from dealing with this? Anyway, that’s that and a national solution to the national problem of the upcoming rent apocalypse is only the largest part of a bigger issue – saving our industry from further devastation. I’ve prepared a list of 15 things we need to see from government. We will continue to campaign and lobby for everything on this list. 13 of the 15 won’t cost the taxpayer anything. We just need action and clarity from the people in power so we can plan and get on with it. For many of us, the next few weeks are going to be as fraught and as difficult as the first few weeks of all this.” The 15 points Downey sets out are: Relax the two-metre rule. Allow us to reopen now in a safe and phased way. Scrap the 14-day quarantine for international travellers. Raise the £51k rateable value grant threshold to £150k. Extend the lease forfeiture moratorium to 30 September. Continue the Job Retention Scheme to the end of the year for those that can’t re-open. Announce a one-year VAT reduction to 5% from 1 July. Expand EIS to boost investment. Support the #FullCapacity Plan. Improve access to CBILs. Help us with insurers. Encourage people to venture out safely again. Provide clarity on re-opening so we can plan and be ready. Give is a #NationalTimeOut to agree a deal on rents. Save two million jobs.

Festival Republic MD launches plan to restart events economy: Melvin Benn, managing director of Festival Republic, has launched the Full Capacity Plan, a national campaign aimed at restarting the leisure economy. The plan details an incentive-based scheme that Benn says would “rapidly increase” the public’s use of the NHS Trace App. He wants to restart the leisure and recreation sector at full capacity. Social distancing causes “economic damage” and the events industry cannot operate under such conditions, says the plan. Working in partnership with the government, a coronavirus test would allow the public to access the entertainment and leisure sectors, for example: pubs, theatre, gigs and sporting events, creating a personal incentive for the public to be tested and traced. Benn told Music Week: “We are currently in a position where the government has capacity to test 1.4 million people a week but testing less than 700,000 because there is no incentive. My plan is to create incentive, to test at least double the current capacity and be aiming for 12-15 million people a month being tested minimum. I am proposing The Full Capacity Plan to stimulate the debate about getting back to normal opening rather than partial opening because partial opening is financial disaster opening. I am proposing The Full Capacity Plan because it’s simple and easy, inexpensive in comparison to the subsidies that the government is currently paying and very achievable with good organisation.” Festival Republic is responsible for some of the most popular music festivals in the UK, including Reading and Leeds, Wireless, Latitude and Download. More than half a million people normally attend the group’s events throughout the year.

Mowgli begins taking bookings for a 6 July reopening: Indian street food concept Mowgli has begun to take bookings across its ten-strong estate as it plans to reopen on 6 July. However, founder Nisha Katona said that “any doubts about the date or feasibility or second wave or anything that puts our people at risk and I will pull the plug immediately”. Writing on Instagram, Katona said: “Just peeking over the parapet – she is not awoken yet but dear Mowglite friends we are now taking bookings with a view to opening – as the government recommends – from the 6th of July. I closed Mowgli before we had to because the safety of my teams and you, was my only concern. That remains the case. Any doubts about the date or feasibility or second wave or anything that puts our people at risk and I will pull the plug immediately again but right now there is no reason not to hope that we can serve you in safety from July. I hope you judge me by my actions so far and trust the pace at which I approach this resurrection-shoulder to shoulder lets stand at the brow of the hill and step cautiously together – You can book your table now on or if you want to book Leeds or Bold Street please email for now – any physical distances we will fill with the boundless spirit and enthusiasm of your Mowgli teams.”

Revolution plans to raise £15m, delist and move to AIM: Revolution Bars Group, the operator of 74 bars trading under the ‘Revolution’ and ‘Revolución de Cuba’ brands, is to raise gross proceeds of up to £15m by way of place of shares. It also plans to delist from the main market an move to AIM. The company stated: “The proceeds of the fundraising will be used by the group to achieve an appropriate level of indebtedness and emerge from the covid-19 pandemic in a position of strength. The Issue Price represents a discount of approximately 42%. to the closing price of an Ordinary Share on 4 June 2020, being the latest practicable date prior to this announcement, and a discount of approximately 23.9%. to the volume weighted average price of an ordinary share for the 30 day period to 4 June 2020. The board intends to invest, in aggregate, £132,000 in the fundraising.” 

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