150 staff go in Abokado rescue deal
A rescue deal to buy fast food chain Abokado out of administration will not save the jobs of its 150 staff.
The company, founded in 2004 by Mark Lilley and his wife Lindsay, filed for administration last week as a dearth of office workers in the City made it uneconomic for its outlets to reopen after lockdown.
Abokado has 19 stores in central London that rely on custom from office workers.
The group has since been bought out of administration by Mr Lilley in a pre-pack administration deal through a new holding company, Montway.
However, Abokado's 150-strong workforce was made redundant last month.
Mr Lilley said five of Abokado’s stores have closed with immediate effect, while talks with landlords over the remaining 14 sites continue.
Separately, a cafe chain that merged with Patisserie Valerie is demanding rent cuts to help weather the economic storm of the pandemic.
Bakers + Baristas has urged suppliers and landlords to approve a deal that would curb its costs due to the “ongoing uncertainty” surrounding coronavirus.
The business has hired accountancy firm BDO to put forward a Company Voluntary Arrangement (CVA), a type of rescue deal that ease costs and debts.
If it wins the backing of creditors, the move will affect 50 cafes across its UK business but not the 13 coffee shops in Ireland.
The moive is another blow for landlords that have suffered swingeing rent cuts as retailers and restaurant chains battle to survive.
The pandemic has intensified the pressure on the high street, which was already struggling with a toxic cocktail of waning consumer confidence and escalating costs.
Bakers + Baristas UK is owned by Causeway Capital Partners, the Irish buyout fund that bought Patisserie Valerie out of administration last year.
The embattled bakery chain collapsed in October 2018 after a £94m black hole was discovered in its accounts.
Causeway has been attempting to resurrect the business after seizing half of its 200 cafes for £5m.
The Dublin-based private equity firm merged the two cafe chains in March, with Bakers + Baristas chief executive James Fleming taking charge of both businesses.
They now share services for baking, coffee and product development but have kept separate brands.
A spokesman for Causeway Capital said: “If approved by the company’s creditors, the proposed CVA would reduce the company’s liabilities and its ongoing fixed operating costs to provide greater financial flexibility to trade given the ongoing uncertainty arising from Covid-19.”
