A subsidiary of Yellowhammer Bars, the bar and nightclub operator, has been placed in administration, M&C Report has learnt.
RSM Tenon was appointed administrator of Yellowhammer Trading Limited, which is understood to be a trading entity that doesn’t hold specific venues, on 4 February.
M&C Report has previously reported that a notice to appoint the administrators for the subsidiary, signed by Yellowhammer chairman Derek Parfitt, was filed on 16 January. The notice says: “The chairman reported that, in view of the ongoing financial difficulties being experienced by the company, the company has consulted with RSM Tenon Recovery to take advice in connection with the financial position of the company and the options available.
“It was proved to the satisfaction of the meeting that the company is experiencing financial difficulties and is insolvent as defined in the Insolvency Act 1986.”
It’s understood that the move will not affect the operation of other subsidiaries.
Late last year M&C Report carried a story saying that Yellowhammer Bars, which is run by Volante Management, has undergone a strategic review that has seen its late-night venue estate cut to 17 sites. According to their websites, two Yellowhammer venues, Bliss Bournemouth and Bliss Taunton, are “temporarily closed”.
Reporting results for the year to 29 February, in which it reported a 18% decline in like-for-like sales, the company said that it had dispose of sites in Banbury, Barnstaple and Swindon and would now focus on five freehold and 12 leasehold units.
The operator of the Groove and Bliss nightclubs and the Chilli White bars saw turnover decline from £24.9m to £20.5m, while pre-tax profit stood at £1.9m down from £4.1m the previous year.
It said: “Reduced consumer spending has continued to hit the sector quite hard and we report an 18% decline in year on year same outlet sales. Since the year-end, a strategic review has been undertaken to ensure that all units to remain in the group are profitable or of strategic importance to the long term viability of the group. The resultant aim of the restructure of the group is to achieve a return to underlying operating profitability.”
At the start of last year, subsidiary Company Time Ltd was placed into administration. The group wrote off £4.2m through the sale of the Company Time’s assets.
