The GMB union is warning that 20 pubs across the Isle of Wight are ‘in serious danger of pulling their last pint’ as owner Stonegate issues a profit warning. The future of more than 750 Stonegate pubs across the South East is unclear as the company says there is no guarantee it can continue as a going concern, as it struggles to refinance a £2billion debt mountain. Gary Lindsay, boss of TDR Capital – which owns Stonegate and the supermarket giant Asda – told the Business and Trade Select Committee back in January that he was ‘confident’ £2.6billion of debts in the Stonegate Pub Company could be refinanced this year. But GMB raised concerns that refinancing could lead to crippling payments to service the massive debt.
Nadine Houghton, GMB National Officer, has said:
“TDR bosses are private equity gamblers – playing fast and loose with people’s jobs and lives. “When their risky ventures go wrong, they swan off to their next project, leaving workers and communities to pick up the pieces. “Now, hundreds of much loved pubs across the South East are now in serious danger of pulling their last pint. “It’s a disgrace.”
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Stonegate is one of the largest pub companies in the UK, with more than 4,500 pubs and more than 19,000 workers, including brands like Slug and Lettuce, Yates and Walkabout. Stonegate has 20 pubs on the Isle of Wight:
| White Hart | Havenstreet |
| Fleming Arms | Binstead |
| Vine Inn | St Helens |
| Sun Inn | Calbourne |
| White Lion | Arreton |
| Pier View Hotel | Cowes |
| Anchor Inn | Cowes |
| Red Lion | Freshwater |
| Slug & Lettuce Isle of Wight | Newport |
| The Hogshead | Newport |
| Castle Inn | Newport |
| Wheatsheaf Hotel | Newport |
| Fever Isle Of Wight | Newport |
| The King Lud | Ryde |
| Horse & Groom | Ningwood |
| New Inn | Shalfleet |
| Wheatsheaf Inn | Yarmouth |
| Falcon Hotel | Shanklin |
| Woodmans Arms | Wootton |
| Griffin | Godshill |
In January, a spokesperson for Stonegate Pubs told Island Echo:
“We continue to invest in our pubs and our people, in particular supporting local pubs which play such a key role in their communities. “Our pub business remains very resilient despite the challenges our industry faces, with good like-for-like sales growth across the group. “Following our recent successful financing announced in December as well as strong recent trading, we are well placed to deliver on our longer term objectives and we are very confident in our ability to re-finance at the appropriate time.”
How can a business be allowed to get into £2 Billion pound debt?!
Bad management
Owe the Bank a Million, you’re in the poo. Owe them a Billion, they’re in the poo.
No…for them it’s good management. It’s deliberate. Investors have skin in the game. If they don’t want to lose their investment they are forced to either invest more or walk away at a loss. They didn’t build their business model via hard work, they’ve only been going 14 years. They did it by acquisitions, buying a few ailing pubs with initial borrowed money then getting someone who wanted a business (pub landlord) to stump up 50k as a get in, but buy cheap beer at maximum price, increasing the rent all the time. It’s about turnover which then tempts equity investors. They all then extract the profits in dividends, having already paid back their initial borrowed money.
This is what Venture Capitalism is all about they borrow huge amounts of money, take a lot of money and use the
income to finance the debt. This the same as ASDA and Morrisons
With the cost of living crisis going on and families that need to eat and keep warm, pubs are a luxury if you like going to them. There will be more pubs going under soon as well.
If you can’t afford to get pissed up
WORK HARDER
Thames Water anyone? Amass a debt, pass it on to punters and landlords whilst pocketing very large dividends.
Hopefully, when they do shut down, the decent pubs that are left will do better. I can’t see 1 pub on that list that will be missed if they did go.
And there are some that should be that aren’t.
Yes – The Falcon.
£2.6 Billion!!! how’s that possible?????
Because they take heavy buy-in money from the landlords, use it to speculate on the markets, take the dividends out when they make money there (not from profits from pints etc) instead of back into the businesses. When it all goes tits-up they still have their massive dividends safely tucked away, they try to borrow more and that debt is then loaded onto landlords and punters via increases. They can’t lose. Only investors lose. The only pubs that will survive are the freehold ones.