Abokado will close underperforming stores across London as part of a CVA (company voluntary arrangement.) The “Pacific-inspired” chain, that operates 23 restaurants across London and is a mainstay of commuter breakfasts and office lunches, issued a statement blaming “sophisticated banking fraud” for its immediate peril, as well as a familiar cocktail of cost pressures, according to Propel.
The company’s most recent accounts filed under Elvetham Limited accounted for the year to 31 March 2018, and recorded “record profits ... achieved despite the well-publicised difficulties facing the restaurant sector including unprecedented cost pressures, weak consumer sentiment and over-supply.” While profits rose, turnover actually dropped between 2017 and 2018, which in turn forecasted the “softening sales” that the chain reports today as it announces its CVA.
Bank fraud is less predictable. The chain says that “in July the business suffered a significant sophisticated online banking fraud, which materially impacted working capital and compounded the trading issues. The fraud is subject to investigation by the relevant authorities but the directors consider it unlikely there will be any recovery.” It is not the first chain this year to be forced into serious measures over fraud: systemic accounting fraud precipitated the collapse of Patisserie Valerie. The conclusion: “while the core Abokado estate continues to trade well, a number of underperforming sites threaten the survival of the whole business.” Restaurants are going to close; it is not yet known which sites are flagged as underperforming.
Abokado’s offer, which bills itself as “Pacific-inspired” but spans breakfast pots, porridge, poached eggs, bagels, yakisoba, rice dishes, soups, sushi, poke, and noodle salads, looks increasingly precarious in a city increasingly full of specialist restaurants covering each element of its territory, while also competing with the maroon ubiquity of Pret a Manger. Unlike Byron Burger, Jamie Oliver’s restaurants, Prezzo and Chimichanga, and Gourmet Burger Kitchen, Abokado’s decline is in the grab-and-go sector, which has thus far proven more resilient, if helped by Pret’s acquisition of Eat. Nine Pod branches, with a similar “healthy lunch” outlook to Abokado, closed this summer; 13 were sold to the Azurri group, which operates pan-Italian Zizzi, pizza specialists Radio Alice, and pasta-meets-coffee City staple Coco di Mama.
Abokado chief executive Mark Lilley concluded:
The proposed CVA will put Abokado in the best possible position to move forward in an uncertain environment. It will allow my excellent management team to continue pursuing our vision of bringing freshly made, Pacific-inspired food to more people.