Shares in Revolution Bars sunk more than 20% as markets opened after the hospitality firm said it would shut 12% of its bar estate in a bid to "reduce future site losses."
The decision to close eight sites including in Sheffield, Southampton and Newcastle, was made because "the macroeconomic trading environment continued to be challenging, and the prospect of the statutory 10.8% increase in the national living wage in April 2024 increases the challenge."
Staff at the closing sites will be offered jobs elsewhere, Revolution said. The firm will have 58 bars and 22 pubs following the closures. Negotiations for five of the eight bars had already begun for them to be transferred to other operators or their leases rescinded.
Group like-for-like sales for the four weeks from 4 to 31 December were up 9.0%, the best festive period since 2019, Revolution said, but sales for the latter six months of 2023 as a whole remained negative at -2.8%.Rob Pitcher, CEO of Revolution Bars Group, said: “We have had the best festive trading period for four years with all of our brands recording positive like for like sales and Revolución de Cuba being the standout performer.
"However, our younger customers are still feeling the disproportionate effect of the cost-of-living crisis and the national living wage will increase materially in April 2024."
In October, Revolution Bars said it had renegotiated the terms of its loans that it was in danger of breaching as it bemoaned a slump in demand.
The bar and pub operator said like-for-like sales had fallen 8.7% in the year to July amid a drop in footfall. The company has dropped the profit-related covenants attached to its debt as it warned it was in danger of breaching covenants if sales slipped back further.
Shares fell 23% to 4.2p. The stock is down 46% over the past year.
