Po Na Na is the latest operator to be hit by the high street property crisis.
Administrators were called in after backers of the 45-strong chain led by the Royal Bank of Scotland refused to give the company more money.
The company said its cash crisis had been caused by the delays it had in selling its 15 underperforming properties. Grant Thornton, the administrator, is to sell all its sites and has already closed two of the struggling units in Aberdeen - the Po Na Na and Athenaeum. The property problems facing the company had been ongoing for the last year. In June 2002 chief executive Christian Arden was forced to take a property write-down in the accounts which put it £5.3m into the red.
Its problem offloading sites is not surprising considering that at the end of last year many operators, including Luminar, SFI Group and Yates, revealed grim trading results and halted their roll-out plans.
Many operators decided to refurbish older sites and put their struggling units on the market. But this has not halted the problems on the high street. SFI Group has been forced to shelve plans to sell its 30-strong Bar Med chain after offers received valued the chain at a third of its £30m price tag.
This has inevitably meant that increasing numbers of leasehold high street sites have been hitting the market - making it harder for operators who are paying high rents to sell these sites on.
Even restaurant companies such as McDonald's have been earmarking sites for disposal - making the market increasingly competitive.
Property agents have predicted that pub companies will continue to lose money on high street sites. Companies that have expanded too quickly and paid too much money for sites are finding it increasingly difficult to make any money out of the town centre market, they argue.
Fleurets' last annual survey revealed that London's high street sites had an average annual turnover of nearly £500,000, but the price achieved for the sites was only £126,000 - 26 per cent of turnover.
Meanwhile, Christie & Co says that the rapid growth of outlets on the high street will lead to saturation in some major cities.
Where some sites are over-rented and trading poorly, Christie & Co has predicted that there will be more casualties on the high street this year following the failure of Old Monk and Mustard.
Sites for disposal
- Athenaeum Aberdeen (closed)
- Babylon Bath
- Bar 8 Bath
- Berlins Cardiff
- Bondai Fulham
- Boom Cheltenham
- Boom Clapham
- Casablanca Swansea
- Creation Bristol
- Embargo Chelsea
- Fez Club Bath
- Fez Club Bristol
- Fez Club Cambridge
- Fez Club Cheltenham
- Fez Club Fulham
- Fez Club Putney
- Fez Club Reading
- Foundation Newcastle
- Hammersmith Palais London
- Lost Weekend Nottingham
- Po Na Na Aberdeen (closed)
- Po Na Na Bath
- Po Na Na Brighton
- Po Na Na Bristol
- Po Na Na Cambridge
- Po Na Na Cheltenham
- Po Na Na Edinburgh
- Po Na Na Harrogate
- Po Na Na & Fez Club Hull
- Po Na Na Leicester
- Po Na Na Lincoln
- Po Na Na Epsom
- Po Na Na Hammersmith
- Po Na Na Kensington
- Po Na Na Chelsea
- Po Na Na Wimbledon
- Po Na Na Manchester
- Po Na Na Newcastle
- Po Na Na Norwich
- Po Na Na Oxford
- Po Na Na & Boom Portsmouth
- Po Na Na Reading
- Po Na Na Sailsbury
- Po Na Na & Fez Club Sheffield
- Po Na Na Swindon
- Quids Swansea
- Warehouse Leeds
Pictured l-r: The Po Na Na team - Rob Sawyer, David Phelps and Christian Arden.
Related articles:
Buyers line up for Po Na Na (14 May 2003)
McDonald's outlets to go on the market (7 May 2003)
Banks call time on Po Na Na (6 May 2003)
Po Na Na suspends shares (29 April 2003)