Simmons: Bar chain owed millions to OakNorth, tax collectors before entering administration
Simmons owed millions of pounds in debts to OakNorth bank and tax collectors before it was put into administration, fresh corporate documents have revealed.
The London-based cocktail bar chain has made at least 30 staff redundant alongside closing several sites as founder Nick Campbell battled to secure rescue funding to buy the company in a pre-pack administration deal.
Simmons owed £5.7m in unpaid loans to OakNorth, as well as £900,000 to tax collector HMRC and £850,000 to local authorities Camden, Westminster, Hackney and Canada. The firm also owned £400,000 to drinks supplier Venus Wine & Spirit Merchants, according to documents filed by administrators Kroll.
The company has approached HMRC with a “time to pay” agreement to delay paying off some of its tax obligations. Campbell is to buy the group out of administration in a £6m deal, which includes paying off the OakNorth debt by rolling it into a new facility.
“In recent years, the group has experienced a downturn in trading, largely attributable to a combination of macroeconomic factors,” Kroll said.
“The cashflow and profitability of the group has been significantly impacted by a continued challenging consumer environment post Covid-19, with consumers shifting away from drinking culture to more health-conscious lifestyles; increased inflationary pressures; and increased overhead costs.”
Simmons did not respond to a request for comment. Campbell did not respond to a request for comment as to how the company would be financed but told CityAM it was “incredibly disrespectful” to ask employees about the state of the business.
Hospitality under pressure
The move adds Simmons to a growing number of hospitality groups that have collapsed, entered administration or massively cut back operations as they face ballooning costs and depressed consumer demand. That has included sharp hikes to employers’ National Insurance Contributions introduced in April, as well as reduced relief on business rates.
The British Beer and Pub Association (BBPA) has estimated that 378 pubs will close this year across England, Wales and Scotland – more than one per day on average – amounting to more than 5,600 job losses.
Kate Nicholls, chair of UK Hospitality, told CityAM: “Sadly the news of further closures and business failures is all too common at the moment.
“Our last survey showed that half of London hospitality businesses are operating at or below break even – up from a third since the Budget. That’s because the costs of doing business – rent, rates, employment – are much higher in the Capital but we have yet to see footfall and visitor numbers recover to pre Covid levels.
“Put simply the money coming through the front door is not enough to cover costs and as a result businesses are running out of road – they are being literally taxed out.”