Stonegate Group, the owner of Slug & Lettuce and Be At One, is considering selling over 1,000 of its pubs. With a total of 4,300 venues under its belt, this move could see the company parting ways with nearly a quarter of its establishments. The Times initially reported that Stonegate executives have been in discussions with potential advisors regarding this matter.
Reports indicate that around 1,034 of Stonegate’s premium pubs, known as “platinum” pubs, are up for potential sale, with a combined value reaching up to £1 billion. While the company achieved a turnover exceeding £1.7 billion last year, it also carries debts exceeding £3 billion.
Stonegate accumulated a significant portion of its debt through the acquisition of Ei Group in 2019, which occurred shortly before the onset of the COVID-19 pandemic that led to widespread pub closures across the nation.
A representative from Stonegate informed The Mirror that they are exploring various options for the Platinum portfolio, including refinancing, partial sale, or complete divestment of the designated sites. However, no final decisions have been made as of yet, as the company continues to make progress on its transformation strategy.
In a previous attempt to sell a similar number of pubs in 2023, Stonegate was unsuccessful. Consequently, the company proceeded to refinance 1,000 venues with a £638 million loan from Apollo, a private equity firm. The non-call period on this loan, which prevented Stonegate from selling the pubs, is set to expire in January.
Established in 2010 following TDR Capital’s acquisition of 333 pubs from Mitchells & Butlers for £373 million, Stonegate has since become a prominent player in the pub industry. Recently, the company put 23 of its pubs on the market, with Savills overseeing the sales process, following collaboration with restructuring specialists from AlixPartners.
Regarding the broader pub sector, Tim Martin, the chief of Wetherspoon, expressed intentions to minimize price hikes despite generating revenues of £2.13 billion for the year. Martin highlighted the impact of tax increases on pricing within the industry but assured efforts to keep price adjustments to a minimum at Wetherspoon.
As the company anticipates a reasonable financial outlook for the year ahead, Martin acknowledged that external factors like government-led cost escalations in areas such as energy could influence the final outcome.