Leon to explore a CVA to ‘move forward' with landlords
Fast-casual chain Leon has confirmed it is exploring a company voluntary arrangement (CVA) in light of current trading conditions, following a report in Sky News.
Chief executive and co-founder John Vincent said: "In the past few weeks we've had very constructive conversations with the majority of our landlords about how we navigate the ongoing challenges of Covid together. Most of our locations have been very hard hit as they are in central London.
"We began this year with a profitable and growing business. In the previous four years we had increased our average restaurant sales by 40% and planned to open 30 new restaurants in 2020.
"Instead, as a result of this second lockdown, our sales are 70% below last year and this is unsustainable. In light of this, the most likely and constructive way to move forward with our landlords is through the framework of a CVA. We stayed open to serve NHS and other key workers throughout this pandemic. Once everyone else returns to city centres and travel hubs we fully expect Leon to grow again, and we will be ready to welcome back our exceptionally supportive customers."
Leon is the latest in a long list of hospitality operators who have turned to a CVA this year as coronavirus restrictions hit trading, including Caffè Nero, Revolution Bars, Ibérica, Wahaca and Pizza Hut all using a CVA to shed sites and negotiate with landlords over the last two months.
Leon is backed by two principal investors, GP Investments and Active Private Equity. It started in 2004 with its first restaurant on Carnaby Street.