Restructure at burger chain Byron could see 20 restaurants close - but East Anglian sites will be spared
PUBLISHED: 15:47 09 January 2018 | UPDATED: 16:26 09 January 2018
Hundreds of jobs are under threat at burger chain Byron after it put 20 restaurants at risk of closure in a proposed restructuring package - but restaurants in the East of England are to be spared the chop.
It is looking to agree a company voluntary arrangement (CVA) to put it on firmer financial ground by securing discounts on rental costs.
A CVA allows a business to close loss-making stores and was recently used by embattled toy retailer Toys R Us.
Accountancy giant KPMG, which is handling the process, said Byron’s directors were using the move in order to secure the company’s future amid “gathering economic headwinds”.
But despite poor performance in some areas its locations in Bury St Edmunds, Cambridge, Chelmsford, Colchester, Ipswich and Norwich – the first in Norfolk which opened less than a year ago – are among those where leases will be maintained at current rents.
And it would need to win the backing of landlords and creditors before being able to push forward with the process – which could see the future of up to 20 restaurants be negotiated.
Will Wright, restructuring partner at KPMG, said: “Over the last 10 years, Byron has grown to become a stand-out name within the UK’s casual dining sector.
“However, in recent times, certain parts of its portfolio have not met expectations, and with gathering economic headwinds starting to impact the sector more profoundly, the directors embarked upon a strategic review of the business as a means of safeguarding its long-term future.”
KPMG added that no restaurants will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.
Mr Wright added: “As part of this strategic review, the directors have been successful in negotiating a financial restructuring with the company’s lenders and shareholders, which will enable new investment to come into the business.
“Completion of this financial restructuring is conditional on the approval of today’s CVA proposal, which is designed to tackle the cost of the company’s leasehold obligations across its UK restaurant portfolio.
“As with similar CVAs, this arrangement seeks to strike a balance which provides a fair compromise to landlords, while allowing the viable part of the business to move forward across a smaller, more profitable core estate.”
Byron, which was founded by Tom Byng in 2007, employs around 1,800 people and has 67 leasehold restaurants and nine non-operational leasehold sites across the UK, including its head office in London.
Simon Cope, Byron chief executive, said: “Byron’s core restaurant business and brand remain strong but the market that we operate in has changed profoundly.
“In order to continue serving our loyal customer base, we need to make some critical and difficult changes to the size and shape of our estate.”
He added: “The teams in our restaurants are always such an inspiration and we will work hard to support them throughout this difficult process.”
Creditors will vote on the CVA on January 31.