Yahoo Finance Revolution Bars suspends trading as Gen Z shun alcohol
Revolution Bars has suspended its shares amid a scramble to raise cash, as Gen Z students cut back on alcohol and late night drinking in a blow to nightclubs.
Bosses at the company, which runs more than 50 bars and clubs and more than 20 pubs across the UK, are locked in talks with investors to stave off collapse after the group was hammered by cost increases and a turn away from late night drinking by Gen Z customers.
The Aim-listed chain’s shares were suspended from the junior market on Tuesday under City rules after it failed to publish its financial results.
It comes after reports that the chain could close as many of a quarter of its sites in a drastic restructure to save the business. If this plan goes ahead, closures could lead to hundreds of job losses.
Revolution Bars Group admitted last week it was “actively exploring all the strategic options available to it to improve the future prospects of the group”. Investors being approached for a lifeline include Luke Johnson, the former chairman of Pizza Express and co-owner of Gail’s Bakery. Talks with investors remain ongoing.
Revolution Bars Group runs the Revolution, Revolucion de Cuba and Peach Pubs brands.
The crisis at the business comes after the British nightclub industry was battered by a combination of rising energy costs and the cost of living crisis. Many late night businesses were already struggling to recover from pandemic lockdowns, which also hammered trading.
As well as cost pressures, young people are also drinking less and going home earlier for lifestyle reasons. Around a third of people aged 18-24 currently do not drink alcohol at all, according to consumer research group Mintel, while those that do are treating it more as an occasional treat.
Gen Z are concerned about the emotional impact of drinking and mental health effects, according to Mintel.
Revolution’s chief executive, Rob Pitcher, said in a previous trading update that the rising cost of living had disproportionately affected students and young people who would previously have flocked to its bars.
As well as cost pressures, young people are also drinking less and going home earlier for lifestyle reasons.
This combination of pressures has led to widespread venue, pub and club closures. Around two UK nightclubs closed their doors permanently every week from March 2020 to December 2023, according to the Night Time Industries Association (NTIA), amounting to the loss of almost a third of the country’s clubs.
Rekom, the UK’s largest nightclub operator, was sold in a pre-pack administration deal in February that saw it shut 17 sites. The rescue came after what it called an “extremely difficult” year.
Revolution Bars previously announced a string of closures in January in a bid to drive down costs, shutting sites in Beaconsfield, Derby, Reading, Liverpool, Wilmslow, Sheffield, Southampton and Newcastle-Under-Lyme.
Mr Pitcher warned at the time that the decision by the Government to increase the national living wage from £10.42 per hour to £11.44 this month – the largest cash increase since the minimum wage came into force in 1999 – meant these bars were no longer financially viable.
Revolution Bars lost £22.2m in the year to June 31 2023. Shares in the company have fallen by almost 70pc over the last six months.
