Recession claims two big names

Last week saw two significant casualties for the UK on-trade as Merchant Inns and Tootsies both went into administration.

Six of the seven pubs within Merchant Inns’ portfolio have now been placed on the market. The pub group owns sites in Berkshire, Wiltshire, Oxfordshire, Surrey and Cambridgeshire, employing around 240 people.

In August the group’s shareholders agreed to sack chairman Robert Breare, who had controlled the business in partnership with property magnate Sir John Ritblat since 2007. At the time, the pair had unveiled plans to invest as much as £200 million into developing a chain of up to 50 pubs. The Merchant Inns business model focused on providing a “luxury budget” experience, offering dining and accommodation at affordable prices.

Meanwhile, Tootsies owner The Clapham House Group has announced it is withdrawing support and funding to this part of its business, which was handed over to administrators BDO Stoy Hayward early last week. The group’s other restaurant businesses, Gourmet Burger Kitchen and The Real Greek, remain unaffected by this action.

BDO has already entered into an agreement to sell 11 of its 21 sites to Giraffe Concepts for £2.5m before costs, thereby preserving around 25 full time and 250 part time jobs. The administrators are continuing to explore opportunities to dispose of the 10 remaining outlets.

David Page, chairman of The Clapham House Group, said: “We have taken the steps described in this announcement with great regret, having spent considerable time researching alternative strategic options for Tootsies. We believe that this is the best course of action to protect shareholder value whilst minimising job losses.”

Gabriel Savage, 20.10.09