Will Wright and Steve Absolom from KPMG’s restructuring practice have been appointed joint administrators to casual dining operator Dining Street Ltd and its two subsidiaries, Richoux Ltd and Newultra Ltd, which have seen trade dry up during the pandemic
Following the appointment, all 147 members of staff have been made redundant.
Will Wright, partner at KPMG and joint administrator, said: ‘The current plight of the UK’s hospitality sector cannot be underestimated.
‘Despite the breadth of support packages available, the reality is that the latest lockdown measures have proven to be a hammer blow for many businesses which, like the Dining Street group of companies, continue to accrue creditor liabilities while seeing little to no revenues coming in.’
Between them, the companies operate 15 restaurants predominantly across London and the south of England under the brands Richoux, Zintino, Friendly Phil’s, Villagio and The Broadwick.
All of the group’s sites had been closed for dine-in services since 20 December 2020 in line with the government’s tier four Covid-19 restrictions, with a handful of sites continuing to provide takeaway and delivery services.
However, with ongoing uncertainty around when restrictions will be lifted and with the companies continuing to accrue liabilities, the pressure on the cash position became such that the directors took the decision to appoint joint administrators.
Wright said the group had a number of popular brands and outlets, and the joint administrators are currently exploring options for a sale of the business and its assets.
The latest findings of the quarterly Market Recovery Monitor from Alix Partners and CGA show Britain lost around 6,000 licensed premises last year, a much faster level of closures than normal.
The licensed sector recorded a net loss of 5,975 sites, which represented a 175% year-on-year increase in net closures versus the 2,171 seen in 2019.
The report stated: ‘The challenging end to 2020, when the vast majority of operators were forced to close at what should have been the busiest time of year, ended an incredibly tough year for the casual dining sector in particular, which saw a 9.7% net decline, and will undoubtedly have caused more business failures.
‘While supported by government grants, concessions, and the furloughing scheme, many small businesses were unable to generate enough cash to stay afloat.
‘The 2020 closure figures may represent just the tip of the iceberg for what is to come in the first part of 2021—two-thirds of these closures happened in the second half of last year.’