Laurel Pub group goes into administration

Mar 28 2008

Slug & Lettuce parent group Laurel Pub Company went into administration today after billionaire owner Robert Tchenguiz failed to find buyers for around 90 loss-making sites.

The group, which also owns high street chains La Tasca and Yates’s, put 378 sites into the hands of insolvency specialist Kroll.

But two new companies backed by Mr Tchenguiz, the property entrepreneur, have bought back 293 profitable sites after the group’s collapse.

Bay Restaurant Group will now run 84 Slug & Lettuce premises, 24 Ha Ha bar and grills and more than two dozen other pipeline sites. These have been merged with the 85 La Tasca restaurants.

The Town & City Pub Company has taken on 161 pubs and bars, mainly comprising the Yates venues.

Around 90 other pub and bar venues, most of which have ceased trading, remain in the hands of the administrators. Around 1,800 staff are affected by the closures, but Laurel is hoping to relocate as many employees as it can to other sites.

A trust operated by Mr Tchenguiz is understood to have pumped between £50 million and £60 million into the two new companies to help secure their future.

Laurel is thought to have been hit hard by the introduction of the smoking ban across the UK.

It is also believed to have seen debt refinancing plans last September scuppered by the credit crunch.

Ian Payne, chairman of both Bay Restaurant Group and Town & City, said: “We are confident that both the restaurant and pub portfolios are profitable and robust.

“With the refinancing of both Bay and Town & City now complete, both businesses have a solid platform from which to expand, grow and maximise their future potential.”

Mr Tchenguiz bought Laurel in 2004 for £151 million, expanding the group by acquisition with the purchase of Yates Group, SFI Group and tapas bar chain La Tasca last year.

Laurel is not the only pub group to have had a hard time amid the smoking ban and stock market turbulence.

Walkabout and Jongleurs owner Regent Inns issued a profit warning in December and said like-for-likes sales continued to decline in January.

Meanwhile Britain’s biggest pub company Punch Taverns also reported a “subdued” Christmas and New Year, like-for-like sales across its managed pubs down more than 2% since August.

And Mitchells & Butlers has also taken a knock after falling victim to the credit squeeze, making a disastrous £274 million loss on transactions relating to a property deal it was forced to abandon last year.

The group is now firmly in the sights of private equity takeover groups and is also being targeted by Punch for a possible merger.