Benito’s Hat has entered into a Company Voluntary Arrangement (CVA) to renegotiate terms with its landlords, as it grapples with what it terms a “cashflow challenge”.
The Mexican food chain has eight sites, with six in London, one in Oxford and one in St Albans, Hertfordshire.
The firm has recently developed a new business model, reducing new build costs and giving it the ability to open stores without extraction in smaller footprints. However, the changes have resulted in a number of one-off costs that have impacted its cashflow, combined with slower-than-expected maturity of its new sites, it said.
This year, Benito’s Hat closed its Goodge Street site in London and in April, its Leicester site in Highcross shut up shop just nine months after it opened.
Managing director Mike Pearson said the company appointed advisers CBW to assess its options earlier this year, resulting in the decision to pursue a CVA, which received 93% backing from creditors.
In a statement, he said: “The clear view of the company's advisers was that whilst the business was facing short term challenges, the core business had real potential and the ability to move forward once the immediate creditor position was resolved. The directors had already taken corrective action to close poor performing stores and are not be seeking to close any further locations. Each store had been assessed on an individual basis and negotiations held directly with the landlords to find the most appropriate course of action in adjusting any lease terms.
“We look forward to continuing to work with our teams and our supply partners to move forward and deliver on the enormous potential for our brand.”
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