Owner of Revolution bars launches sale process as turnaround falters

The company behind Revolution bars has put itself on the market for a potential sale as it disclosed tumbling sales over the past three months.

The Revel Collective, which runs venues under the Revolution, Revolucion de Cuba and Peach Pubs brands, said sales have been hit by cost-of-living pressures on its younger customer base.

The group, which rebranded from Revolution Bars last year, also said it was knocked by warm weather over the summer.

It told shareholders on Friday that the group has now hired advisers to launch a strategic review into funding and other options to help improve its future prospects.

The Revel Collective said this will include a formal sales process to see if any potential parties or investors wish to buy the company.

It said no current discussions are taking place with potential suitors.

The group undertook a major restructuring last summer, in which it shut 15 unprofitable bars in a bid to turn around its performance.

On Friday, bosses at the firm said persistent “challenging economic conditions” and “Government interventions in the last budget” have helped “thwart” its ability to improve since the restructuring.

“Action taken to reduce costs and increase margins has not been sufficient to mitigate the negative impact of the autumn budget changes to the employer NICs threshold, minimum wage and duty on spirits,” the company added.

In July, the company indicated that there was reason for optimism after signs of improvement.

However, bosses said revenue has been weaker than expected in the months since because of fragile consumer sentiment.

It said this was “particularly evident” among its younger customers, while its bars business was hit by warm weather.

Revenues dropped by 7.4% to £26.3m over the three months to September, driven by a 10.5% like-for-like decline in its bars business.

It said this offset a “satisfactory” performance by its Peach Pubs business.

The company also disclosed that its debts grew further, rising to £25.3m from £22.1m at the end of June.