Is the game over for Sports Cafe?
THE Sports Cafe bar and restaurant chain has plunged into administration with bank debts of more than £10m.
The business’s banks refused to stump up rescue funds for the struggling company so there was no option but to seek the protection of administration.
The company announced on Wednesday last week that it was attempting to secure extra funding after poor Christmas trading and a slow start to 2008, but that was not successful.
Accountants Baker Tilly are now in charge of running the company’s affairs and have kept the company’s eight nationwide outlets – including one in Newcastle – trading while they seek buyers to take over the business.
Shares in the group were suspended on Friday before Sports Cafe confirmed it was descending into administration.
Sports Cafe had a troubled history in the North-East even before opening up.
The company bought the former TSB bank building on Grainger Street in the city and set about converting it into the Newcastle Sports Cafe.
But during construction work, demolition workers destabilised the building which caused the roof and rear wall to collapse in spectacular fashion.
Hundreds of workers had to be evacuated from the surrounding area and the Metro line which runs beneath the structure was closed temporarily.
However after extensive rebuilding work, the Sports Cafe opened for business in September 2005 and has proven very popular.
Financial problems at the Sports Cafe headquarters in London have now caused the company’s collapse.
Yesterday administrator Bruce McKay from Baker Tilly said the business had racked up bank debts of around £10m and further detailed examination of the company’s books was likely to uncover further owings.
He said: “Our primary motive is to find a buyer, or a collection of buyers. The units generally have been trading OK, they have been generating profit, but there’s a big central overhead with the levels of debt the company has.
“The whole of the licensed trade has taken a knock over the last few weeks. And the smoking ban has started to pinch since the weather went bad.”
The Sports Cafe opened its first bar in London in 1995, catering to sports enthusiasts by showing events live on dozens of screens.
Other bars have since followed in Leeds, Glasgow, Manchester, Birmingham, Bristol, Newcastle and Liverpool. In 2006 the London-based business made operating losses of £553,000 on sales of £18.2m. Last year the Sports Cafe raised £4.4m to cut debts through the sale and leaseback of its Birmingham site.
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