End of the road for loss-making Walkabout bars
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Version 0 of 1. The private equity multi-millionaire Jon Moulton is preparing to close about a fifth of the Australian-themed Walkabout bar chain he bought only three months ago. The move to off-load Walkabout outlets tops off a tough few months for Moulton’s Better Capital fund, which came under fire for calling in administrators at the delivery firm City Link on Christmas Eve. The firm would not disclose how many of the 32 Walkabout bars would be closed next month. It announced that creditors had agreed to a company voluntary arrangement (CVA), which was cutting the debt of its Intertain outfit – the owner of the brand – from £30m to £14m. However, it previously said it was asking creditors to approve the closure of seven outlets. Walkabout is the latest high street operator to close branches using a CVA, an increasingly common way for owners to off-load unprofitable stores while maintaining control of the company. Earlier this week landlords and other creditors of the tailoring brand Austin Reed agreed to a CVA under which it closed 31 shops immediately and cut the rent on 35 more. Austin Reed’s shareholders agreed to inject £3m of cash to keep the 115-year-old business’s remaining 166 stores trading as normal. The Intertain chief executive, John Leslie, said a few sites were making losses or had unsustainable levels of rent so were not viable. “To secure the long-term future of the business, we have had to exit the loss-making sites, and these are likely to close [by] mid-March,” he said. “However, with the support of our landlords we have been able to positively address the over-rented sites by reducing the rents to more sustainable levels.” Better Capital bought Intertain, which also owned Jongleurs, in November in a £20m deal, just before causing controversy by calling in the creditors at City Link. The collapse of the Coventry-based delivery firm, which left about a thousand self-employed van drivers without any payoff and more than 2,000 employees redundant, followed writedowns on the value of Better Capital’s investments in a number of companies including the luxury yacht maker Fairline and the fashion brand Jaeger. While other investments, including the double-glazing firm Everest, have fared better, shares in Better Capital have dived more than 40% since January last year amid concerns about the performance of its two investment funds. Last month, Moulton, whose personal fortune is estimated to be £100m, admitted to a committee of MPs that he had made “a mistake” in investing in City Link, which he thought could be turned around by cutting costs. “It was a weak player in a weak pricing environment,” Moulton said. |