Talking 'bout a Revolution

What are Luke Johnson's prospects for turning around the struggling bar group?

Sat in the Revolution Bar in Wilmslow one Thursday afternoon with copies of all the daily papers to choose from, nursing a cup of coffee for far too long, I was pretty sure this wasn’t the original idea that the founders of the business had in mind.

As the DJ arrived to start setting up the decks for an evening of much younger people necking vodka, it was apparent that this was an estate that probably needed to be run more efficiently.

So I held that thought throughout the early part of this year as things have gone from grim to grisly for the national bar chain of 58 bars and 22 pubs.

In October 2023 Revolution Bars Group had reported a pre-tax loss of £22m in the year to 1 July 2023 which the company directly blamed on the cost-of-living crisis and changing habits which were affected by trading restrictions under the pandemic.

Then, after Christmas, despite things picking up the company over the festive period, it announced closures at eight of its “least profitable bars” to reduce future site losses in January. 

The closed bars included the Wilmslow one I nursed my coffee in. But also Beaconsfield, Derby, Reading, and Liverpool as well as the Revolución de Cuba bars in Sheffield and Southampton and the Playhouse in Newcastle-Under-Lyme.

Last week things took an even darker turn when shares were suspended in the AIM listed stock after they weren’t able to release their results.

Then, last night (10 April 2024), they dropped details of what they hope will provide a reset and a restructure of the business.

As Rob Pitcher, chief executive, described it, the continued challenges on top of the cost-of-living crisis “disproportionately impacted them”, making the current process inevitable.

A few things emerged out of last night’s drop.

In short the vodka bar and gastro pub business is pursuing a twin track rescue and restructuring deal with backing from entrepreneur Luke Johnson, who will join the board, and with the support of other existing shareholders.