Cocktail establishment Simmons in London enters administration, announcing planned closures of locations
London Cocktail Chain Simmons Enters Administration Amidst Rising Costs and Struggling Hospitality Sector
The London-based cocktail chain, Simmons, has entered administration, marking another blow to the struggling hospitality sector. The company, which operated more than 20 venues across the UK, will be closing at least four sites, including one in Putney, as part of a strategic restructuring aimed at focusing on financial sustainability and operational improvements.
According to Simmons' financial reports, the company posted a loss of £749,000 for the year to end March 2024, reversing a profit of just under £2m the previous year. This financial decline, coupled with the ongoing challenges faced by the hospitality industry, has led to the company's decision to exit four lease locations.
The main cost pressure factors contributing to hospitality firm closures, including Simmons, include rising operational costs and the need to streamline resources toward their strongest-performing venues. Stricter licensing rules in areas like Putney may also deter replacements, adding regulatory cost pressures indirectly impacting operational viability.
The British Beer and Pub Association (BBPA) has estimated that 378 pubs will close this year across England, Wales, and Scotland, amounting to more than 5,600 job losses. Kate Nicholls, chair of UK Hospitality, stated that half of London hospitality businesses are operating at or below break-even, and that costs of doing business are much higher in the Capital but footfall and visitor numbers have yet to recover to pre-Covid levels.
Nick Campbell, the founder of Simmons, stated that the decision to close the four sites was made to focus resources on the strongest performing venues. The chain has secured funding for future expansion but needed to concentrate resources on venues generating the best performance.
Kate Nicholls, in a statement to City AM, expressed her concern over the costs of rent, rates, and employment in London, which are much higher than in other regions, but have yet to see footfall and visitor numbers recover to pre-Covid levels. She also mentioned that businesses are being "taxed out" due to costs not enough to cover expenses.
The move to close more hospitality groups, including Simmons, is due to ballooning costs and depressed consumer demand. The BBPA's estimation of pub closures includes more than one per day on average. The sharp hikes to employers' National Insurance Contributions introduced in April and reduced relief on business rates are contributing factors to the closures and struggles of hospitality groups.
Simmons has appointed advisory firm Kroll to oversee the administration. The exact number of job losses due to the closures has not been disclosed. The closure of Simmons venues adds to the growing list of hospitality groups that have collapsed, entered administration, or massively cut back operations, a fact not included in the BBPA's estimation of 378 pub closures this year.
[1] Simmons enters administration, 2024 [2] Simmons posts loss of £749,000, 2024 [3] Stricter licensing rules impacting hospitality, 2023 [4] BBPA estimates 378 pub closures, 2024 [5] Hospitality businesses struggling in London, 2023
- The financial industry faces a challenging landscape as Simmons, a retail business in the UK hospitality sector, enters administration amidst rising costs and operational struggles, 2024.
- The insurance industry could be impacted by the loss of revenue due to job losses in the hospitality sector, as Simmons posts a loss of £749,000, 2024.
- The business environment may become more complex due to stricter licensing rules in certain areas, such as Putney, potentially increasing costs for hospitality businesses, 2023.
