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Fri 21st Aug 2020 - Wasabi to undergo CVA, ‘handful’ of sites to close
Wasabi to undergo CVA, ‘handful’ of sites to close: Wasabi, the sushi and bento chain led by Henry Birts and backed by Capdesia, has launched a company voluntary arrangement (CVA) that will see a “handful” of sites close. Founded in 2003 and employing more than 1,500 staff, Wasabi operates 51 sushi and bento shops in the UK, 42 of which are in London and heavily reliant on office workers and tourists. The company said with the likelihood of future trading continuing to be adversely affected by ongoing social distancing measures, the gradual return to the workplace of office workers in London and the reduction in tourism, the company is undertaking a financial and operational restructuring programme that will see additional investment from the company’s investors, conditional on the approval of a CVA. Propel understands Wasabi, which is looking to move towards a variable, turnover-based rent system, has decided to embark on the CVA after discussions with a number of landlords hit a stumbling block. The “handful” of sites that will close are thought to comprise mainly of leases that were due to expire in the short-term or considered to be loss-making and not viable in the long term. Birts told Propel he was looking to keep the number of redundancies to a minimum. He added: “Prior to the outbreak of the pandemic, Wasabi had been performing strongly on the back of the investment and operational improvements we had made during 2019. However, the extraordinary impact of covid-19 on trading has meant we now need to take additional steps to address our fixed cost-base if we are to secure the long-term future of our business. In recent weeks, we have had constructive engagement with landlords regarding better alignment of the rents of certain sites in proportion with footfall and trading, and we will continue to work closely with them over the days ahead. We strongly believe that this turnaround programme will provide us with a stable platform upon which we can emerge from this difficult period as a healthy and sustainable business, for our staff, suppliers and loyal customers.” Will Wright and David Costley-Wood from KPMG are the proposed nominees of the CVA. Paul Berkovi, KPMG’s head of leisure restructuring, added: “With large numbers of city centre workers and tourists remaining at home, grab and go food retailers have been some of those businesses most significantly affected by the covid-19 crisis. With the outlook remaining uncertain, Wasabi is taking decisive action to safeguard its future.” Last month Propel revealed Wasabi had appointed KPMG to explore a full range of strategic options, which included seeking potential new investment partners or a purchaser for the business alongside raising funds from existing investors. 

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