Drake & Morgan has announced plans to enter a company voluntary arrangement (CVA) just days before the industry is allowed to fully reopen again.
The London-based bar and restaurant group recently undertook a strategic review which concluded that action needed to be taken to safeguard the future of the business following a year in which it has hardly been able to trade.
It is understood that three of the group’s 22 sites will close as part of the CVA, which requires the support of landlords and creditors.
Employees at the three sites affected by the restructuring will be offered alternative roles within the business.
Founder and chief executive, Jillian MacLean, said: “We started last year as a profitable and growing business and, in common with the rest of the hospitality industry, have been significantly affected by repeated lockdowns and tier restrictions.
“This course of action, if approved, will safeguard the future of the group and give it the breathing space it needs to recover.”
Ms MacLean said the company has started to welcome customers back to its venues and was fortunate to have a number of large terraces that are in demand.
“We have spent the past year developing our teams and innovating our product, and we are now looking to the future,” she said.
The CVA is being handled by accountancy firm Deloitte. Partner Gavin Maher said: “The CVA will allow flexibility in this period of uncertain trading by moving to a predominantly turnover-based rent model for its duration.
“Drake & Morgan was a successful business prior to covid-19 and this action will enable the business to emerge strongly from the pandemic.”