(Alliance News) - Revolution Bars Group PLC has announced plans for an overhaul which could see 18 of its bars shut down, as the chain has been hammered by cost-of-living pressures and regular train strikes affecting its younger customer base.
The Manchester-based bar group, which operates the brands Revolution and Revolucion de Cuba said it was also considering whether putting itself up for sale would be a better option than restructuring.
The group, which owns Revolution Bars as well as chains including Peach Pubs and Revolucion de Cuba, said it has thought hard about its future after recently facing financial difficulties.
Its shares were suspended from trading on the London Stock Exchange earlier this month after its financial results were delayed.
But its share price jumped by 48% on late Thursday morning to 1.70 pence each after the suspension was lifted.
Revolution said it was planning to raise up to GBP12.5 million through a fundraise which would help return the business to profitability.
It has the backing of businessman Luke Johnson, the former chair of restaurant chains Pizza Express and Giraffe and a prominent hospitality investor.
This would take place alongside cost savings which could include offloading its loss-making sites, which it expects to be 18 bars, including six which are already closed.
It is also set to receive about GBP6.9 million of additional support from its secured creditor.
The bar and pub chain has been vocal about the challenges it has faced as a result of the Covid-19 pandemic, rising inflation, and staff shortages.
It said its Revolution Bars have been particularly hit by the cost-of-living crisis squeezing consumer finances and regular train strikes affecting its younger customers.
If it does not go ahead with a fundraise or making cost savings from restructuring, then the firm said it expects to face "liquidity pressures" next year.
It is also mulling over a sale which it said could be more beneficial for shareholders than the restructuring efforts.
It is not currently in any discussion with a potential suitor, and it stressed there can be no certainty that an offer will be made.
By Anna Wise, PA Business Reporter
Press Association: Finance
source: PA
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Rev Bars (RBG)