The bingo operator will close more than a quarter of its venues, putting more than 500 jobs on the line.
UK.- Buzz Bingo has announced it will permanently close 26 of its 91 bingo halls in the UK.
Despite plans to reopen the majority of its venues on August 6, the operator, formerly known as Gala Bingo, has said it predicts an “unsustainable operating environment” to continue the foreseeable future.
The closures represent more than a quarter of the operator’s bingo halls and risk the loss of 573 jobs at venues including Edinburgh Westerhailes, Milton Keynes, Salford, Carlisle, Bournemouth and Wolverhampton.
Most of the company’s 3,400 staff remain on furlough after venues closed on March 21 due to the Covid-19 lockdown in the UK.
The decision forms part of a company voluntary arrangement (CVA) – a procedure under UK insolvency law that allows a company to reach an agreement with creditors.
Through the arrangement, Buzz has renegotiated with landlords at some remaining venues to align rents with forecast business. It will seek creditors’ approval of the CVA at a meeting on August 3.
The operator’s owner, Caledonia Investments, has said it is willing to inject an extra £22million of equity capital on top of the £5million it invested in May once the CVA comes into effect.
Chris Matthews, Chief Executive of Buzz Bingo, said: “The ongoing pandemic has had far-reaching consequences for the entire leisure and hospitality sector and an immediate and significant impact on our business.
“Following a thorough review of our options, the proposed CVA will restructure our retail portfolio to ensure we are well positioned for a return to growth, while adapting to the ongoing, challenging environment as we start to reopen the majority of our clubs.
“Our lenders are supporting our plans and our owners, Caledonia will be investing into the new structure to further strengthen our future business.
“The restructure will, very sadly, impact a number of our colleagues and my priority is to support all those affected and keep them fully informed as we continue with this process.
“I would like to thank every single one of our colleagues for their continued understanding and commitment over this period.”
Melanie Leech, Chief Executive of the British Property Federation (BPF), a trade association for property companies, said: “Buzz Group and AlixPartners engaged with the BPF before launching this CVA proposal.
“This has provided us an opportunity to improve understanding of property owners’ interests and concerns, but ultimately it will be for individual property owners to decide how they will vote on the CVA.”
Buzz Bingo’s online business continues to operate as usual. The company has sought to reduce costs during the pandemic by cutting senior management pay and using the UK government’s furlough scheme, but the company believes daily operations will be severely impacted for some time.
Buzz Bingo was created through a £40million rebranding of Gala Leisure’s bingo division in 2018. The business was acquired by Caledonia Investments from the Gala Coral Group for £241million in 2015.
Last month it emerged that the casino group Genting was considering permanently closing some venues in the UK.