Byron burger’s Harrogate restaurant could close as part of restructure

The Harrogate branch of Byron Burgers is one of 20 nationally at risk of closure under plans for the company to introduce a rescue deal.

The company voluntary arrangement (CVA) proposal outlined by the firm will also see its Leeds branch identified as being viable at a reduced rent, equivalent to two thirds. The chain’s York branch is one of 51 proposed to be retained at current rent.

Byron said that the proposed business model would be more suitable to the current economic headwinds affecting the sector, whilst continuing to meet Byron’s obligations to suppliers and creditors. The proposal allows Byron to rationalise the costs of its leasehold obligations and refocus the business on a smaller, more profitable core estate.

Under the terms of the proposed transaction, existing investor Three Hills Capital Partners would become the majority shareholder.  Hutton Collins will sell half of its current holding in Byron to Three Hills Capital Partners and will retain a significant minority interest in the business.

The company needs to secure at least 75% creditor approval for its CVA. The creditors will vote on the CVA on 31 January.  KPMG, which is leading the firm’s restructure, will spend the next two weeks in talks with creditors to ensure they understand the full detail of the proposal.

Byron added: “In the event of closures, we will do everything possible to redeploy staff to other stores and other initiatives.”

Byron operates 67 leasehold restaurants across the UK. It holds a further nine non-operational leasehold sites including its head office in London.

 

CEO of Bryon, Simon Cope, 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.

“With the support of our new owners, our creditors, landlords and other business partners, I’m confident Byron will able to continue providing our consumers with the best burger experience.

“The teams in our restaurants are always such an inspiration and we will work hard to support them throughout this difficult process.”

The CVA divides the chain’s portfolio into three categories. A total of 51 sites, including York, would see leases retained at current rents.  A further five leases, including Leeds, have been identified as being viable at a reduced rent, equivalent to two thirds.

For the remaining 20 sites, which includes Harrogate, a reduced rent, equivalent to 55%, will be paid for six months, while the company engages with landlords to agree the basis of any continued trading from these premises.

Will Wright, restructuring partner at KPMG and proposed ‘supervisor’ of the CVA, said: “Over the last ten 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.

“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. It’s important to stress that no restaurants will close on day one, and employees, suppliers and business rates will continue to be paid on time and in full.”

 

 

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