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Wed 2nd Dec 2020 - Update: Loungers results, closed sites, Vikki O’Neill, nightclubs ‘sacrificed’
Loungers ‘confident about the future’, hires Eve Bugler as chief operating officer: Loungers has reported turnover down 33% to £53.49m in the 24 weeks ended 4 October compared to £79.82m the year before. Adjusted profit before tax was £739,000 compared to £2,630,000 the year before. Like-for-like sales rose 25.1% between 4 July and 4 October. The company stated: “Underlying like-for-like sales performance (excluding the positive impacts of EOTHO and the VAT reduction) of -1.1% in the period to 4 October declined only fractionally to -1.3% in the extended period to 4 November, in spite of the growing impact of the 10pm curfew and the ultimate inclusion of 55 of our sites in tier two and three areas. In the short term we expect a more severe impact on sales. In England we have 60 sites that will remain closed under tier three, with 91 sites trading in tier two and three sites trading in tier one. In Wales we have 14 sites that will be subject to increased restrictions from 4 December. The strength of our brands and the manner in which they performed coming out of the first lockdown provides confidence for the future and we would expect a strong trading environment for our brands once covid-19 restrictions are eased. We anticipate returning to a run rate of 25 new site openings per annum during the course of the financial year ending April 2022.” Nick Collins, chief executive of Loungers said: “The last six months have been challenging, but I am immensely proud of how we have reacted and delivered such a strong performance. We are fortunate that due to our suburban and market town locations, the flexibility of our offer, and our fantastic team, we have been able to trade well when given the opportunity to open our sites. As we dare to look beyond covid-19, Lounge and Cosy Club have never seemed more relevant, and we approach 2021 with enthusiasm and optimism. Our strong balance sheet will enable us to get back to doing what we do best, opening 25 sites a year, creating over 500 jobs a year, investing in high streets across the UK and looking after our customers and teams. With the encouraging news on the development of vaccines, it certainly feels like that time is within reach and I would like to say a huge thank you to our teams for their commitment and engagement over these past difficult months. We are grateful to the ongoing support we have received from the government, in particular for our employees through the furlough scheme, and recognise our position is one of relative security. However, the recent restrictions imposed are bewildering, unfair, appear to lack any scientific basis and will decimate the hospitality industry across the UK. On re-opening in July our sector invested hugely in providing a safe environment for people to eat and drink-out, and then demonstrated it was indeed safe during Eat Out to Help Out in August. These most recent interventions, at the most critical time of year for the sector, will cost hundreds of thousands of jobs, see the demise of thousands of pubs, bars and restaurants and leave vacant properties across the UK. The impact on the livelihoods and health of the sector’s predominantly young workforce and on communities and high streets across the UK will be felt for years to come. I would strongly urge the Government to engage with our sector, provide immediate, targeted support where required, and re-consider the ill-thought through policies that have brought much of our industry to its knees.” Loungers is also hiring Bababoom founder Eve Bugler as chief operating officer. Collins said: “I am delighted to announce Eve Bugler will join the business as chief operating officer on 14 December. Eve previously held roles at McKinsey, Nando’s and more recently founded BabaBoom. Eve’s blend of entrepreneurial and commercial experience is very much aligned with the Loungers’ ethos and existing senior management team. Eve will take responsibility for the commercial, build and people arms of the business and will sit on our executive board. Justin Carter (Lounge managing director) and Amber Wood (Cosy Club managing director)) will continue to report into me. Eve’s appointment will strengthen our collaborative leadership team and ensure our continued growth comes alongside improved performance across all facets of the business. It will also free up my time to focus more directly on achieving our strategic objectives and further allow Justin and Amber to drive continued evolution and improvement in Lounge and Cosy Club respectively.” Earlier this year, Bababoom appointed Graham Ford, formerly of Bill’s, Carluccio’s and Strada, as its interim managing director, whilst the search for a permanent managing director was launched. Bugler told Propel at the time: “As the largest shareholder in BabaBoom, and given my passion for all things kebab-related, I will continue to relish my involvement as a board member and as guardian of the concept and culture. I am very pleased that Graham Ford, who has been working with us since July, leading on all matters operational, will be taking the helm in an interim role until the end of April. Graham is a very experienced operator having held senior positions in Strada, Bill’s and Carluccio’s.”

More than 50,000 licensed premises unviable as English lockdown ends: As many as 50,000 licensed premises could keep their doors closed after the end of the national lockdown and the start today of the new tiered restrictions in England, the latest Market Recovery Monitor from CGA and AlixPartners reveals. The report lays bare the scale of the challenge facing restaurants, pubs, bars and other venues in December, despite yesterday’s assurance from government of some limited financial help for drinks-led pubs. Research for the Monitor indicates that just 2,227 licensed premises – 2% of the total – are located in tier one areas of England, where restrictions are lightest. A total of 36,648 (39%) are in tier three areas, where hospitality venues must close completely except for takeaways and deliveries. The rest – 55,502, or 59% – are in the middle ground of tier two and subject to strict limits including a ban on selling alcoholic drinks unless they are served alongside substantial meals. CGA’s research suggests that at least a third of operators in tier two could be unable to trade while subject to these regulations. Combined with tier three businesses, it means that more than 50,000 licensed premises in England may not open their doors this week. It follows news from the Market Recovery Monitor that only one in 16 of Britain’s licensed premises were trading at the end of November. With England’s hospitality sector closed except for deliveries and takeaways, 6,890 licensed premises in Scotland and Wales were open to guests – just 6.2% of Britain’s pre-lockdown total. Some regions in Scotland remain subject to closures, meaning that only two in five (40.4%) of its sites were open. Numbers were only slightly higher in Wales (42.2%), despite some restrictions being eased after its 17-day lockdown – and they are likely to fall again when new trading limits are introduced later this week. “After a steady recovery over the summer, these new figures illustrate the catastrophic impact of the government’s restrictions on hospitality’s ability to trade,” said Karl Chessell, business unit director for food and retail at CGA. “The experiences of Scotland and Wales show that a release from lockdown is no guarantee that businesses can reopen. Despite the end of England’s shutdown, the harsh tiered arrangements means tens of thousands of England’s premises are simply unviable in their most important trading month of the year. The longer the system remains in place, the bleaker are the prospects for survival for many of these businesses.” AlixPartners managing director Graeme Smith said: “After what has undoubtedly been an ‘annus horribilis’ for the hospitality sector, in normal times we would now be entering the most important four trading weeks of the year. However, the overwhelming majority of businesses in this sector are operating under crippling conditions and the government’s latest offer of additional financial support for wet-led pubs appears unlikely to be sufficient to enable these businesses to survive. Figures from UKHospitality suggest the sector could see around £7.8bn of revenue wiped out with the tier system in place, compared to last December. Any dreams that operators might have had of a post-lockdown bounce in England have quickly turned into the nightmare before Christmas as a result of these new restrictions. Much attention is being placed on what comes next given the messaging from the Prime Minister that restrictions will likely be in place well into the new year.”

Vikki O’Neill joins Vapiano as global marketing director: Vikki O’Neill, of VON Marketing, has joined Vapiano as its global marketing director – previously she has been a consulting as UK head of marketing since 2012. She began her in 1999 at Wagamama when it had three restaurants, overseeing the brand’s growth to 68 sites. In 2007, she joined the Joffe family at Giraffe, before becoming a freelance consultant in 2011, During the past nine years she has worked with more than 30 sector businesses including Sticks’n’Sushi, Pizza Union and Ole & Steen. Her new role will focus on creating and delivering a cohesive global brand strategy across 32 countries, working with the new Vapiano owners, including Mario C. Bauer, Sinclair Beecham, Henry McGovern and other investors as well as with Alan Laughlin chief executive of Vapiano, with direct reporting to Monika Czyz, chief operating officer. 

Trade body – the night time economy is being sacrificed: The late night trade body has argue that the nightclub industry is being sacrificed to allow other sectors to trade through December. Michael Kill, chief executive of the Night Time Industry Association, said: “Today’s parliamentary vote on the new covid restrictions will be the final nail in the coffin for thousands of businesses in tier two or three areas. Without the required financial support, 75.6% of night time economy businesses now face the reality of permanent closure. Many of these are the smaller businesses that are part of the very fabric of town and city centres and of our social lives. So many of these are now condemned to the heartache of business failure as a result of the conscious decision of the government. These new restrictions, overtly targeting the hospitality sector, have no real grounding in scientific fact and leave little or no confidence in the government making science-based policy decisions. It is now abundantly clear that the night time economy is being sacrificed so that other sectors may trade through the festive period. If the government will prevent our sector from operating sustainably then it must also proportionately compensate the sector for lost revenue, pre and post the festive period. Anything less can only be perceived as a direct intent to collapse the sector. Ignorance is no longer an excuse, given the extensive support packages that both Scottish and Welsh governments have recently extended to the night time economy. Quite simply, the UK government has intentionally left us out in the cold. The £1,000 contribution for wet lead pubs as a top up grant is an insult, What about nightclubs? One business type that has escaped the narrative of financial support since March. We will not stop fighting to show the government that it is unacceptable to force a sector out of business. Robbing people of their businesses and livelihoods by starving them of financial support is morally unacceptable and a form of economic vandalism. With these restrictions based on unfounded logic and reasoning, one thing is clear: this is not a government for business.”

Westminster City Council to extend al fresco dining scheme: Westminster City Council has announced it has extended its al fresco dining scheme in central London for another six months. Council leader Rachael Robathan said the scheme, which allows venues to provide ‘pop up’ dining areas in streets, continued to be an important way of supporting the hospitality industry in London, which will fall under tier two of the new restrictions. She said: “We have 3,700 restaurants, pubs and bars in central London and they help to support around 80,000 jobs. Hospitality is a big employer for us and while the sector faces another tough few months under tier two restrictions, at least we can support those venues who can offer outside space.”

Tesco decides to repay £585m business rates relief: Tesco is to repay to the UK government and the devolved administrations the £585m of business rates relief received in respect of the covid-19 pandemic. The company stated: “In March, the UK faced an unprecedented situation as the pandemic took hold. For food retailers, the impact was immediate and potentially disastrous: panic buying, severe pressure on supply lines, major safety concerns and the risk of mass absences from work, culminated in a real and immediate risk to the ability of supermarkets to feed the nation. We are immensely grateful for the financial and policy support provided to us by the governments of the UK. This was a game-changer and allowed us to ensure customers got access to the essentials they needed. The decision at the time to provide rates relief to all retailers was hugely important. These funds meant that we had the immediate confidence, in the face of significant uncertainty, to invest in colleagues, and support our customers and suppliers. We are immensely proud of our colleagues for their remarkable efforts during covid. Every penny of the rates relief we have received has been spent on our response to the pandemic. Our latest estimate at our Interim Results in October was that covid would cost Tesco c.£725m this year – well in excess of the £585m rates relief received. Ten months into the pandemic, our business has proven resilient in the most challenging of circumstances. While all businesses have been impacted – many severely so – we have been able to continue trading throughout, serving many millions of customers every day and although uncertainties still exist, some of the potential risks faced earlier in the year are now behind us. We remain absolutely committed to doing the right thing by our customers, colleagues and all our stakeholders. We are therefore announcing that we will return to the public the business rates relief received in full. We will work with the UK government and devolved administrations on the best means of doing that.” Ken Murphy, group chief executive: “Our colleagues have done an exceptional job in responding to the challenges of the pandemic. We have invested more than £725m in supporting our colleagues, putting safety first, more than doubling our online capacity to support the most vulnerable customers in our communities, and hiring thousands of additional colleagues at a time of need. While business rates relief was a critical support at a time of significant uncertainty, some of the potential risks we faced are now behind us. Every decision we’ve taken through the crisis has been guided by our values and a commitment to playing our part. In that same spirit, giving this money back to the public is absolutely the right thing to do by our customers, colleagues and all of our stakeholders.”

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