Bar operator feels pinch as credit crunch bites

Jun 17 2008

A bar operator with heavy exposure to London’s financial district admitted today it was in crunch talks over the survival of the business.

Food and Drink Group, which operates Henry J Bean’s bar and grill and Jamies Bars, said it was in discussions with lenders about providing additional funding “to secure the immediate future of the business.”

The company issued the statement at the same time as it requested the suspension of its shares on the London stock market. Trading was halted with the stock already 41% lower.

Chelsea-based Food and Drink is vulnerable to weakening confidence and job losses in the City. It has five Jamies Bars in the City and Canary Wharf, six wine bars in the City and 11 other independent bars in the City and West End.

As well as its London venues, Food and Drink has sites in Bristol, Manchester, Chelmsford and Wimbledon.

It added today it was also in discussions with several other parties which may lead to a takeover offer for the business.

Food and Drink added: “The company notes the recent fall in its share price. Following the continuation of challenging trading conditions, Food and Drink Group confirms that it is in discussions with providers of finance to procure sufficient additional funding to secure the immediate future of the business.

“There can be no guarantee however that these discussions will lead to a favourable outcome for Food and Drink Group.”

In January chief executive James Kowszun said he was hopeful the company could ride out the downturn.

Mr Kowszun said at the time: “In times of turmoil we are as much a necessity as a luxury. They become a bit of a haven and are designed to be able to make people relax.”