Stonegate Group, the owner of popular establishments like Slug & Lettuce and Be At One, is considering selling over 1,000 of its pubs. With a total of 4,300 venues in its portfolio, the pub chain may divest nearly a quarter of its properties. The initiative was first reported by The Times, indicating that Stonegate executives have been in discussions with potential advisors.
Reports suggest that around 1,034 of Stonegate’s high-value “platinum” pubs could be put on the market, potentially fetching up to £1 billion. Despite generating revenue exceeding £1.7 billion in the previous year, the company carries debts exceeding £3 billion.
The significant debt burden faced by Stonegate is largely attributed to its acquisition of Ei Group in 2019, which occurred just before the onset of the COVID-19 pandemic that led to the closure of pubs nationwide.
A spokesperson from Stonegate informed The Mirror that they are exploring various options for their Platinum portfolio, including refinancing, partial sales, or full divestment of the affected pubs. No final decisions have been made as the company continues to progress with its transformation strategy.
In a previous attempt to sell a similar number of pubs in 2023, Stonegate was unsuccessful. Following this, the company refinanced 1,000 venues with a £638 million loan from Apollo, a private equity firm. The non-call period on this loan, which restricted the sale of the pubs, is set to expire in January.
Established in 2010 after TDR Capital acquired 333 pubs from Mitchells & Butlers for £373 million, Stonegate has continued to adapt its business strategy in response to market conditions. Recent actions include putting 23 pubs up for sale, with Savills leading the sales process, and engaging with restructuring specialists from AlixPartners.
On a separate note in the pub industry, Tim Martin, the CEO of Wetherspoon, expressed intentions to keep price increases minimal despite challenges in the wider industry. Wetherspoon reported revenues of £2.13 billion for the year, and Martin emphasized efforts to mitigate price hikes amidst potential cost pressures, particularly from government-led increases in areas like energy.
By continuing to monitor market conditions and making strategic decisions, Stonegate and other industry players aim to navigate challenges and maintain stability in the evolving hospitality landscape.