Polpo, the pioneering Venetian restaurant group founded by Russell Norman and Richard Beatty in 2009, owes £550,000 to Her Majesty’s Revenue and Customs (HMRC), according to a letter sent to the group’s creditors by business management company Ellwell Watchorn & Saxton. The letter, seen by Propel Hospitality, also shows that the restaurant group seeks a Company Voluntary Arrangement (CVA), to close two restaurants and resolve its debts, as numerous casual dining chains — Jamie’s Italian, Byron Burger, Carluccio’s, Gourmet Burger Kitchen, and Gaucho — have done in the past six to twelve months.
The letter focusses on the appointment of a new “management team” in 2017, to oversee the restaurants on Norman and Beatty’s behalf — this includes former managing director Scott MacDonald, who left his post in November of last year. It cites “a decline in operational standards and performance,” with an explanation given that “the key management team were not as engaged in the day-to-day promotion and management of the business.” The letter cites a management director’s annual salary as £180,000, in a list of savings made since October 2018.
Key investments made by that management team are listed as “ the employment of marketing agencies and investment in high-speed internet connectivity,” which “didn’t directly benefit the underlying trading business.” This increase of costs — both from new initiatives, and the salaries for the management team — coupled with a decline in sales and footfall led to a lack of available funds. Said lack of funds left the restaurant group unable to pay that tax bill, then at £500,000, increasing to £550,000 after the business failed to adhere to an agreed payment plan drawn up in September 2018. The proposed CVA — includes two site closures, with “the company ... looking to exit two of its central London restaurant sites.” This, paired with Richard Beatty’s appointment as managing director, will “further support the company’s cash flows going forward.”
The letter comes after Polpo’s Soho “big sister,” Polpetto, was put on the market for £95,000. That restaurant had been relaunched — with some fanfare — but newly appointed head chef Anthea Stephenson left the Berwick Street restaurant after just two months. The letter does not cite which two restaurants are loss-making, but it is understood that Polpetto is one of them. The Notting Hill Polpo is also on the market, but has been for some time.
Norman and Beatty’s portfolio — which also covers Spuntino, the Soho dive bar which recently opened its first of several proposed airport offshoots at Heathrow Terminal 3 — has set benchmarks for London dining since its inauguration in 2009. The no reservations, small plate dining, and artfully distressed walls with filament bulbs that became its hallmarks have become hallmarks for so many others. Just this week, critic Tim Hayward referred to Berenjak, the latest restaurant for JKS Restaurants — who might be talked about as this decade’s most pioneering restaurant group — as having been “Polpo’d,” when talking about its interiors.