Buzz Bingo to close 26 retail sites in Covid-19 cuts
UK operator to implement cost saving measures following “severely impacted” revenue stream
Buzz Bingo will permanently close 26 of its bingo clubs as the financial impact of Covid-19 takes its toll on the retail and online operator.
The move to restructure its retail estate comes after the company noted that it “expects … an unsustainable operating environment for the foreseeable future”.
Following a consultation period involving stakeholders and landlords, Buzz Bingo took the decision to implement a company voluntary arrangement (CVA), which aims to realign operations to mitigate the financial haemorrhaging experienced by the firm in recent months.
The closure of 26 clubs is set to impact 573 of Buzz Bingo’s 3,400-strong workforce, with the restructuring aimed at retaining the presence of 91 clubs and the remaining 2,800 employees.
Under the remit of the CVA, Buzz Bingo is also in constant dialogue with club landlords to align rents relative to forecast trading.
Buzz Bingo’s retail sites were forced to close during the Covid-19 lockdown, with clubs expected to reopen from 6 August with social distancing and protective measures in place.
Buzz Bingo said its ability to generate revenue had been “severely impacted”, while it had also taken the decision to reduce senior management pay and take full advantage of the government’s furlough scheme for the majority of staff.
Caledonia Investments, Buzz Bingo’s parent company, has indicated it would be willing to inject an additional £22m in equity capital following the successful implementation of the CVA.
Buzz Bingo CEO Chris Matthews said the firm was “well positioned” to tackle H2 2020 following the CVA.
Matthews said: “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.”
Matthews went on to praise his employees for their efforts and attitude during the tumultuous period.
He added: “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.”