Polpo has had its CVA approved by 98% of its creditors which now means that it can shut down its Notting Hill Gate and Berwick Street Shops
Turnover in the year to April 2018 was £13.56m, down 5% on the previous year, which was attributed to the closure of restaurants in Bristol and Exeter as well as the sale of the group’s Ape and Bird site in the London’s West End.
Polpo recorded a pre-tax loss of £1.35m, a reduction on the £2m loss recorded the year before. Increased costs including National Living Wage and food prices had seen gross profits fall from 43% to 35%.
Responding to the difficulties, founder Richard Beatty took over as managing director from Scott Macdonald in October 2018 and has since made head office savings of £1m a year.
Despite the savings the company did not have sufficient funds to meet historic obligations to HMRC, which has led to it pursuing a CVA.
The CVA will see the business enter negotiations with non-critical creditors as well as closing two loss-making London sites. A vote took place today (8 March) and gained the approval of more than 75% of creditors.
In documents filed with Companies House, the company says that the re-involvement of founders Beatty and Russell Norman has re-engaged the group’s customer base and boosted staff morale, resulting in a successful December.
The report reads: “Assuming the CVA is successful, the directors believe they have put the foundations in place to ensure the future viability of the business.”