Restaurant brand Square Pie has announced the closure of all of its sites after falling in to administration.
The group has blamed a “perfect storm” of falling retail demand together with rising rents, rates, increased staffing costs and food price inflation.
About 50 employees have lost their jobs after accountancy firm KMPG, failed to find a buyer for the restaurant side of the business following “an extended period of losses”.
Rob Croxon and Will Wright of KPMG were appointed joint administrators today (5 February) and were forced to immediately close the loss-making restaurants in London’s Westfield White City, Westfield Stratford, The O2 Greenwich, Vue Leicester Square and Birmingham’s Grand Central.
Founded in 2001 by Martin Dewey and wife Lucy, the company started as a food stall in London’s Spitalfields market.
Dewey said: “Following a month-long process, in conjunction with KPMG, to market the restaurants and the business as a whole to potential food sector buyers across the UK, we were unable to attract any party to make an offer to acquire the whole business as a going concern.
“The collapse of the restaurant business was something we were desperate to avoid, and we were hopeful even as recently as last weekend that we could save the stores and the jobs, but unfortunately the backing didn’t materialise in the current leisure climate.
“Together with my colleagues, we worked tirelessly for over 15 years to create a fantastic brand, and I am devastated that we couldn’t make the restaurants work in the current economy. Whilst the wholesale side of the business remained viable, in the end we ran out of money to put into the business to keep the outlets.”
Dewey was among the creditors to the business, which also include HMRC, a number of trade creditors, landlords and bondholders.
The £4m turnover business reached its peak in 2015 with seven sites in London and Birmingham. It offered a menu of pies, macaroni cheese, baked potatoes, sides and British classics such as sausage and mash, with non-gluten, skinny, veggie and halal options.
Last year, loans from the company’s directors allowed the group to launch off-shoot brand Square & Co within the Bluewater shopping Centre in Dartford, Kent. It aimed to turn around the struggling group with an offering of street food alongside the classic Square Pie menu.
Square Pie’s wholesale division will continue to trade after angel investor and entrepreneur Oliver Wessely acquired a majority stake in a new venture, Beat Foods, that has bought the rights to produce Square Pie products for its grocery and wholesale customers for a six-figure sum.
Since its incorporation, the wholesale arm has catered for sites including: Manchester United, Virgin Atlantic Upper Class, Wimbledon Lawn Tennis, Twickenham Rugby and the Olympic Stadium. Luke Morgan, who joined Square Pie in October last year, will become managing director of Beat Foods which will be headquartered in Nantwich, Cheshire.
Wessely said: “Square Pie has a great brand and product, and we have acquired the grocery and wholesale business from the administrators to ensure continuity of production. With the assistance of the founder and senior management team who know the customers and product range, we have been able to ensure that we will fulfil every order. Unfortunately, given the current tough trading conditions in the casual dining sector, we were not able to fund a business plan to rescue the loss-making restaurants.”
Rob Croxen, partner at KPMG and joint administrator, said: “These are tough times for companies in the casual dining sector as operators continue to contend with rising input costs, fragile consumer confidence and the impact of the Living Wage.
“Our priority now as administrators is to work with those employees being made redundant whilst realising the company’s remaining assets.”