Polpo founders focus on food and service after £4m liability saw it pursue CVA
Polpo's founders will focus on "food standards and the quality of service" after liabilities amounting to more than £4m saw them pursue a Company Voluntary Agreement (CVA).
The restaurant group was liable for the sum to creditors including employees, suppliers, landlords and HMRC, when it sought the CVA.
Documents related to the process, seen by The Caterer, showed that £457,001 was for contracted employee earnings. Of this amount, £96,222 was to employees classed as preferential creditors.
Beatty told The Caterer: "Our number-one priority was protecting the livelihoods of our 200 staff. We also wanted to provide uninterrupted service to our loyal customers and work with our core suppliers to ensure as fair a deal as possible. We were overwhelmed by the support we received."
He added: "The energy of the management team will continue to refocus on the remaining Polpo sites at Soho, Covent Garden, Smithfield, Chelsea and Brighton. Since late 2018 we have overhauled both our front and back of house teams with a renewed emphasis on food standards and the quality of service. We are about to launch our spring/summer menu, which includes some of the classics from 2009 when we first opened Polpo Beak Street. We will also be taking our senior chefs and key managers back to Venice in April to help us reconnect with the city and food of our original inspiration."
The founders said an over-investment in head office infrastructure and a focus on "expensive but ultimately ineffective marketing initiatives" had contributed to financial difficulties. Polpo's management team has since been scaled back to four members of staff, including new operations director Sam Jewel, previously of Balthazar and Caprice Holdings, head of back of house operations Tom Ross, Beatty and Norman. The senior group plans to be in the restaurants and kitchens daily.
When the group entered its CVA, the company was liable to pay trade creditors £1.1m, landlords £1.87m and HMRC £909,523. These included Liberty Wines (£113,817); Billfields of London fruit and vegetable market (£52,845) and Enotria Wine Cellars (£60,363). A tronc liability is also listed for £216,385.
An estimated £391,082 will be made available to preferential creditors, according to the documents, which said it is anticipated that critical creditors will receive 75p for every pound owed, while category two landlords and non-critical creditors will receive 5p for every pound owed.
Following the approval of the CVA by 98% of creditors, Polpo's founders put up a £10,000 reward to be paid for help securing a new site for their Spuntino band, after announcing its Soho restaurant will close.
The Rupert Street restaurant, which offers small plates of Italian-influenced New York cuisine, will be returned to landlord Hallmark Estate on 31 July.
Beatty said: "We are working hard on the rehousing of Spuntino especially in the light of the great success the brand has had at Heathrow Airport. We have already looked at two sites and our ‘finder's fee' initiative is working well."
Polpo's turnover in the year to April 2018 was £13.56m, down 5% on the previous year, which was attributed to the closure of restaurants in Bristol and Exeter as well as the sale of the group's Ape and Bird site in the London's West End.
Polpo recorded a pre-tax loss of £1.35m, a reduction on the £2m loss recorded the year before.
Polpo founders offer £10,000 finders fee for new Spuntino site>>
