Byron could close dozens of restaurants under CVA plans
Byron Hamburgers could close more than a dozen restaurants if a Company Voluntary Arrangement (CVA) restructuring plan is approved.
Byron said in the event of closures it would "do everything possible" to redeploy staff to other stores.
Will Wright, restructuring partner at KPMG and proposed ‘supervisor' of the CVA, stressed no restaurants would close immediately following the CVA, and employees, suppliers and business rates will continue to be paid on time and in full.
Byron has submitted restructuring plans to creditors, which, if approved, will substantially reduce Byron's rental obligations.
Five sites have been identified as being viable at a reduced rent, equivalent to two thirds. Another 20 have been identified for reduced rent, equivalent to 55%, which will be paid for six months while the company engages with landlords to agree the basis of any continued trading.
Should the CVA secure at least 75% creditor approval when it is voted on on 31 January, private equity company Hutton Collins, which paid £100m for Byron in 2013 and also owns Wagamama, will sell half its current holding in Byron to existing investor Three Hills Capital Partners, retaining a significant minority interest in the business and leaving Three Hills as the the majority shareholder.
Byron said the restructured business will be "more suitable to the current economic headwinds" affecting the casual dining sector.
Chief executive of Byron 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."
Cope joined the company as managing director in May 2017, shortly after Andrew Manders - who was appointed chief executive at the end of 2016 following the departure of Byron's founder Tom Byng - left the business for "personal reasons". Cope was promoted to chief executive in September.
Byron operates from 67 leasehold restaurants across the UK, having opened its first restaurant in 2007. The restaurant chain closed several under-performing sites last year, including its restaurants at Manchester's Corn Exchange and the Metrocentre in Gateshead.
Wright 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.
"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 owner considers sale amid casual dining headwinds >>
Simon Cope appointed CEO of Byron >>
Byron Burgers to close Corn Exchange restaurant after two years >>
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