Revolution Bars Owner Initiates Sale Process Amid Sales Decline

The Revel Collective, the parent company of Revolution Bars, has commenced a sale process following a significant decline in sales over the past three months. The company, which also manages the brands Revolucion de Cuba and Peach Pubs, attributed this downturn to rising cost-of-living pressures affecting its younger customer demographic.

In a statement to shareholders on September 29, 2023, the Revel Collective announced that it has engaged advisers to conduct a strategic review, exploring various funding options to improve its financial outlook. This review includes the possibility of a formal sales process to gauge interest from potential buyers. Currently, the company noted that there are no ongoing discussions with interested parties.

The Revel Collective, which rebranded from Revolution Bars last year, underwent a major restructuring in the summer of 2022. This included closing 15 unprofitable bars in a bid to enhance overall performance. Despite these efforts, the company indicated that persistent “challenging economic conditions” and recent government budget interventions have hindered its recovery since the restructuring.

The firm explained, “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.”

In July, the company expressed cautious optimism, citing early signs of improvement. However, it now reports weaker-than-expected revenues, driven primarily by a decline in consumer sentiment among younger customers. The warm weather during the summer months also adversely impacted bar sales.

Sales figures reveal a troubling trend as revenues fell by 7.4% to £26.3 million for the three months ending in September. This decline was largely influenced by a 10.5% drop in like-for-like sales across its bars. While the Peach Pubs division performed “satisfactorily,” it was not enough to offset the significant losses in Revolution Bars.

The company also disclosed an increase in its debts, which rose to £25.3 million from £22.1 million at the end of June. This growth in debt highlights the ongoing financial challenges facing the Revel Collective as it navigates a turbulent market landscape.

As the Revel Collective seeks to address these issues through a strategic review and potential sale, the future of the company remains uncertain amidst a backdrop of economic pressures and changing consumer behaviors.