Drake & Morgan plans CVA with possible closure of three sites

Bar and restaurant group Drake & Morgan is planning to enter a company voluntary arrangement (CVA), which could see three sites close.

The chain, which runs 22 venues in London, Manchester and Edinburgh, said it was taking action to survive the “unprecedented and challenging” trading conditions brought on by the pandemic.

Drake & Morgan is seeking the support of its landlords to secure the future of the business by moving to a predominantly turnover-based rent model.

Under the proposals the Allegory and the Listing bars in London and the Refinery Spinningfields in Manchester will close. The bar group said affected staff will be offered alternate roles in the company.

Drake & Morgan, which was founded in 2008 and is backed by private equity firm Bowmark Capital, reported pre-tax profits of £1.5m in the year to 29 March 2020. Turnover was £50.2m, while earnings before interest, taxes, depreciation and amortisation were £4.3m.

“We started last year as a profitable and growing business and, in common with the rest of the hospitality industry, have been significantly affected by repeated lockdowns and tier restrictions,” said Drake and Morgan’s founder and chief executive Jillian MacLean.

“This course of action, if approved, will safeguard the future of the group and give it the breathing space it needs to recover. We would like to thank all our stakeholders for their support during this challenging period.”

Drake & Morgan has appointed Deloitte to advise on the CVA. Gavin Maher, a partner at Deloitte, said: “Drake & Morgan was a successful business prior to Covid-19 and this action will enable the business to emerge strongly from the pandemic.”

A number of other hospitality groups have been forced to restructure using CVAs during the pandemic, including PizzaExpress, Wahaca, Caffe Nero, Yo! and the Restaurant Group.