UK: Pubs n Bars collapses into administration
UK pub chain Pubs n Bars has collapsed into administration, reflecting one of the toughest periods the UK pub and beer sector has known.
All of the firm's 87 pubs remain open today (9 December) but closures are likely, said the appointed administrator, accountancy group Grant Thornton.
Last week, Pubs n Bars suspended trading on the UK's AIM stock exchange, with banks financing the business on a "day-to-day basis".
Banks have since pulled support for the company, which had earlier breached lending terms.
A source familiar with the situation told just-drinks that there is little appetite for continued support for the firm among its main banks, due to the global financial crisis.
"Despite making a proposal to the bank, it has not been prepared to provide additional funding to the group to enable it to continue to trade," said Pubs n Bars in a statement today.
David Thurgood, one of three administrators appointed by Grant Thornton, said: "Currently we are assessing the financial situation of the group and each of the pubs individually whilst all the pubs remain operational for the time being. However, it is clear that some of the weaker units may need to be closed to conserve cash in the business."
Around 50 pubs are closing down every week in the UK, according to the British Beer and Pub Association.
A drop in consumer spending and the smoking ban were the main reasons for a drop in Pubs n Bars sales in the first half of 2009, to the end of June, said the group.
Sales fell to GBP10.3m (US$17m) from GBP11.2m in the same period of 2008. The group swung to losses of GBP0.74m, compared to net profits of around GBP15,000 a year earlier. Net debt at the end of June was GBP34m.
Sectors: Beer & cider
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