Fri, 12 Jul 2024 | BUSINESS SALE
A burger chain with restaurants across the South West of England has been acquired out of administration in a pre-pack deal that secures 300 jobs. Hub Box fell into administration after being hit by rising prices and failing to secure a solvent sale.
The chain was initially launched in Cornwall and subsequently expanded to 10 restaurants across the South West, with locations including St Ives, Portsmouth, Cheltenham and Exeter. Over the past three years, the company has seen consistent revenue growth, but more recently has been heavily impacted by rising costs for food, energy and labour, as well as high interest rates.
In the year to December 31 2022, Hub Box Limited reported revenue of £14.8 million, up from £12.3 million a year earlier, but saw its losses grow considerably from £281,618 in 2021 to more than £1.2 million.
Amid growing cashflow pressure, the company was forced to ask shareholders to inject nearly £500,000 in order for the business to trade through the winter and defer paying some bills. New openings were put on hold and the business also had to continue paying rent on an empty unit in Devon that it was not able to turn into a new restaurant.
The directors subsequently worked with advisers from Interpath Advisory to explore investment options to support continued operations and drive future expansion. A sale of the business was also explored, but a solvent solution could not be found, leading to the decision to appoint Interpath’s Steve Absolom and Will Wright as joint administrators.
Immediately upon their appointment, the joint administrators concluded a sale of the business and assets to South West Restaurants Limited. The deal will see all of the firm’s restaurants continue to trade and all staff transfer to the purchaser. It has also been reported that the deal will involve Hub Box Chairman Alex Reilley stepping down from the business.
The transaction was led by Sam Birchall, head of Special Situations at Interpath Advisory, who said: “Hub Box has grown a loyal customer base in the South West but, like many other casual dining operators, has been hit hard in recent years by high cost inflation.”
“We’re pleased to have secured this transaction which safeguards the future of the brand and which, importantly, preserves employment for 300 staff.”
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