Birmingham bar The Breakfast Club is to be shut down after a buyer for the business could not be found following the collapse of its parent company.
The club, formerly Henry J Bean's, in Broad Street, was part of the Food and Drink Group, which was placed into administration on Tuesday.
Administrator BDO Stoy Hayward yesterday secured the sale of part of the business to private equity-backed Mainpaint, saving 17 bars around the country and securing more than 300 jobs.
However, 125 staff, including those in Birmingham, have lost their jobs as the remaining 11 bars in the Food and Drink portfolio could not be salvaged. In addition to Birmingham, the unsold sites include Henry J Bean’s in Bristol. And investors are likely to receive nothing after the deal with Mainpaint.
Food and Drink, which also runs The Puzzle and Jamies Wine Bars chains, declined to reveal the sale amount, but said it was “a consideration which is not expected to result in any return to shareholders”.
Food and Drink has been suffering amid soaring overheads and a downturn in consumer spending.
The group secured further finance in January, after which it sought to look at options for its future, including raising new equity, reversing another business into the group and a sale of the group as a whole. But it said the deteriorating market conditions left it unable to find a buyer or continue as a business.
Shay Bannon, business restructuring partner at BDO Stoy Hayward, said: “A reduction in the amount of disposable income as a result of escalating living costs and household bills have played a role in The Food and Drink Group’s current difficulties.
“This has been further compounded by a period of wet weather which has failed to boost sales during the summer.”
The board of Food and Drink added: “The group has been facing the most challenging economic conditions for decades which has reduced operational performance and has restricted investment in the group’s brands. These conditions have prevented the Group raising the further financing it needed.”
NBGI Private Equity has backed Mainpaint for the deal, with experienced bar operator Nick Tamblyn being appointed as chief executive of the acquired bar group.