Bramwell's demise shows that the going’s still tough

08-Nov-2013 - Last updated on 08-Nov-2013 at 14:48 GMT

Berry: "Bramwell's failure is a blow for the pub sector’s reputation as an employer that can offer job security and a structured career path"

The reaction in the PMA office when the news broke that Bramwell Pub Company had entered administration was mostly one of mild surprise rather than any great shock, writes Mike Berry.

The chain that operates 185 pubs and bars and employs approximately 3,300 staff — making it one of the top 10 largest managed pub companies in the UK — is now in the hands of administrators Zolfo Cooper after the group experienced cash-flow problems arising from the “current challenging economic environment”.

It is generally thought that the restructure in September 2012 instigated by the management team — led by former Mitchells & Butlers executive Roger Moxham — did not go far enough in reducing the group’s then £163m debt pile or in off-loading poorly performing sites. Investment in the group’s core estate, which is understood to be performing well, has been hindered by pressure to service the firm’s long tail of leasehold properties.

Shredded

It’s all too easy to look back on past comments with the benefit of hindsight, but last year the group trumpeted that its financial restructuring placed it on a “firm financial footing”, allowing a planned investment in service, training and refurbishment in line with the new business plan.

That plan has now been shredded, with high-street rival Stonegate Pub Company eyeing about 80 of the better-performing sites, and the weekend newspapers full of damaging reports that customers were turfed out of pubs and doors locked as the closures began.

It’s not as though the business suffered from a lack of ideas; since morphing into Bramwell in September last year, the company unveiled a new food-led café/bar format called Wild Lime Bar & Kitchen, which it thought could expand to up to 100 sites. It also tapped into the craft-beer explosion by launching a new format, The Longroom, in London.

Tough environment

Looking beyond the black and white of the balance sheet, uncertainty remains for thousands of Bramwell employees as they wait to hear what the future holds for them. The news is also a blow for the pub sector’s reputation as an employer that can offer job security and a structured career path.

Of course, businesses fail in every sector, but the loss of another pub company, particularly one the size of Bramwell, is felt acutely as consolidation in the sector comes back into play.

Ultimately, Bramwell’s failure shows just how tough the operating environment continues to be, particularly in the competitive town-centre arena, with new, dynamic entrants popping up all the time.

Once again, it demonstrates how fragile consumer leisure spending remains as the economy creeps back towards sustained growth.