Struggling pubs which have been hit hard by the pandemic could be bought up at reduced prices by large pub chains, according to separate plans published by JD Wetherspoon and a new US-backed venture.
Bars in London and inner cities are likely to be the primary targets for buyouts, as they have been worst impacted by the loss of tourism and trade from workers.
In a statement to investors, Wetherspoons described plans to raise almost £100 million through placing new shares, with some of the money earmarked to “facilitate the acquisition of new properties”.
It said the properties “are likely to be available at favourable prices, as a result of the pandemic” and that “it may be possible to achieve a higher-than-average return on capital on properties acquired in the next few years”.
Pubs remain closed
In another recent statement, the pub group said it expected all 872 of its premises to remain closed until April due to the pandemic.
JD Wetherspoon said it has not made any sales so far this year, with all of its pubs remaining closed since at least 31 December.
The pub giant said 99 per cent of its staff are currently on furlough. It has reduced the number of total staff in the business by 6,000 since the pandemic began, to 37,674 employees.
Redcat Pub Company
If it goes ahead with its buyout plan, Wetherspoons will compete with a new venture, Redcat Pub Company, run by former Greene King boss, Rooney Anand, and backed by an unnamed US private equity firm.
The new pub group is reportedly looking to spend £200 million on pubs and bars across the UK.
These large investment moves come as the country’s pub industry is in severe difficulty due to the impact of lockdowns and the pandemic generally on trade. Pubs remain closed throughout the UK, and are unlikely to open again until April.
‘Delay in grants for pubs is scandalous’
Despite the Government offering additional support to the pub industry in the form of £,1000 grants, almost 75 per cent of pubs eligible for the grant are yet to receive the money, according to the British Beer and Pubs Association (BBPA).
More than half of the grants which were announced to help pubs during the period of tiered restrictions in November have also not yet been paid, according to the Guardian.
Speaking to the Guardian, chief executive of the BBPA, Emma McClarkin, said: “Months have passed by yet still thousands of pubs are waiting on the grants they have been promised. These grants are a vital lifeline, but only when delivered.
“It is unbelievable that so many pubs are still waiting on their Christmas grants and grants for the second lockdown. Considering we are now in a third lockdown it is scandalous.
“Publicans across the country are desperately checking their bank accounts every minute of every day to see if they have got their payment. Our sector is hanging by a thread, so for many pubs getting these grants is the difference between surviving or closing for good.
“The prime minister personally promised some of these grants for wet-led pubs. We implore him to now intervene and ensure his promise is delivered.”