40 jobs saved as buyer found for Imperial Hotel

Oct 23 2009 by Andrew Mernin, The Journal

THE jobs of 40 people at a troubled hotel which has suffered administration twice in three years either side of a major fire have been saved by a new investor.

The Imperial Hotel in Jesmond has been rescued from administration by Newcastle-based hotel empire Cairn Hotel Group for an undisclosed sum.

The £40m-a-year firm negotiated the deal with London-based liquidators Smith & Williamson and freehold firm REIT Asset Management.

The hotel was put on the market in the summer after the collapse of its operator Brentwood Hotels and, although the business had continued to operate as normal, staff have twice been put on 48 hour redundancy notice since July.

Aran Handa, whose family owns the Cairn group, now plans to spend £3m on revamping the hotel and has also moved to assure staff that their jobs are safe.

He also said the acquisition would be a new dawn for the former Swallow- branded hotel which has suffered more than its fair share of upheaval.

He said: “We’ve taken the Swallow signs down and all the staff have been told there’s a job for them and they’ve got big smiles on their faces. We are determined to keep the staff and we are going to spend a lot of money retaining a focus on the wedding business that’s always been here.”

The Cairn group has enjoyed sizeable growth over the last decade as its annual turnover has climbed from around £18m in 2002 to £40m this year. Its 18-strong portfolio of hotels stretches from Aberdeen to London and includes the Royal Station Hotel, Newcastle and the Royal British Hotel, Edinburgh and the Saint Georges Hotel on London’s Regent Street.

Mr Handa said the company would continue to look for further acquisitions as it battles to maintain growth regardless of the recession. He said: “ We haven’t done badly in the recession and we’ve got some good locations which are doing quite well.”

For general manager Alan Smith, Mr Handa’s intervention is a rare piece of good news in what has been a rocky road for the hotel’s staff.

In 2006 staff faced the threat of redundancy after the collapse of Swallow Group and then, two years later, a major fire ripped through the hotel, leaving it partially closed for 15 months. It was fully re-opened in May this year, only to be hit by news that its parent company had fallen into administration two months later.

Mr Smith said: “All the staff and regular customers are delighted that the hotel has been saved. We have all been told that the long-term future of the hotel is safe.”

The Imperial was one of four Brentwood-operated hotels in the North East which faced an uncertain future with the collapse of the firm.

James Money, of liquidators Smith & Williamson, said efforts would continue to be made to find a future for the Three Tuns in Durham, the Swallow in Gateshead and the Swallow in Stockton.