Stricken burger chain Byron weighs up closing three Scotland stores
Staff at the three Scottish branches of stricken burger chain Byron are waiting to learn their fate after the company confirmed 20 restaurants are at risk of closure as part of a proposed restructuring package.
The burger chain is looking to agree a company voluntary arrangement (CVA) to help put them on firmer financial ground by securing hefty 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.
However, last night a spokeswoman said they were unable to confirm which stores formed part of the list, leaving Edinburgh’s North Bridge and Lothian Road eateries in the dark along with the Union Square branch in Aberdeen.
A fourth Scottish restaurant on George Street in Glasgow closed only last week.
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”.
It would need to win the backing of landlords and creditors before pushing forward.
The announcement comes as the group said Three Hills Capital Partners would strike a deal to become the biggest shareholder as part of a sale process.
Will Wright, restructuring partner at KPMG and proposed ‘supervisor’ of the CVA, said: “Over the last ten years, Byron has grown to become a standout 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.
“ 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.”
Byron operates from 67 leasehold restaurants across the UK. The firm holds a further 9 non-operational leasehold sites including its head office in London.