London restaurant offers ‘war bonds’ to ease cash flow strains

A London restaurant group has launched a series of vouchers with a “war bond” theme, in order to raise precious cash to keep the business running during the coronavirus shutdown. 

The fundraising efforts by Boisdale, a group that counts Nigel Farage, Charlie Sheen and Arnold Schwarzenegger among its customers, follows similar measures by other high-end outlets across the capital, including Mayfair-based Bellamy’s and one Michelin-starred Barrafina, as cash flow problems begin to grip the industry.

“The idea is to remember the war spirit and bring everyone together, as well as put a smile on people’s faces,” said Ranald Macdonald, Boisdale’s managing director.

The discounted vouchers have sold well so far, Mr Macdonald added, with the £100 “Long Victory Lunch” proving the most popular among customers. The voucher entitles the bearer to dishes up to the value of £200 any time over the next year, redeemable in a single visit to any of Boisdale’s locations in Mayfair, Belgravia, Canary Wharf or Bishopsgate. For that offer, wine is not included. 

Like many small businesses forced to shutter during the pandemic, restaurants are struggling to stay afloat, even as various UK government schemes begin to roll out to support enterprise during the crisis.

Restaurateurs, however, have found some of the schemes lacking. In particular, some say the Coronavirus Business Interruption Loan Scheme has unduly onerous terms. “They [the banks] want a cash flow statement for the next 12 months, but cash flow based on these circumstances can be a work of fiction,” said one owner, speaking on condition of anonymity.

Restaurants tend to be very sensitive to interruptions in revenues. A 2016 report from the JPMorgan Chase Institute found restaurants carried the smallest cash buffers of any small-business sector, with an average of just 16 days of reserves if demand were to grind to a halt.

Harts Group, which owns the Barrafina chain of tapas bars, member’s club Quo Vadis and several dining spots across the capital, began offering discounted vouchers to its customers in February. “We saw quite early on that we were going to have a massive cash flow problem,” said James Hart, the group’s commercial director, noting that efforts so far have raised about £80,000. “We’re blown away by the support,” he said.

Bellamy’s, a Franco-Belgian brasserie often cited as the Queen’s favourite restaurant, launched a scheme at the weekend in an email to customers. Owner Gavin Rankin said he has since been staying “up to 2.30am writing thank-you letters,” adding that many customers have waived the 20 per cent discount the restaurant has offered as part of the deal.

Since the shutdown began in mid-March, many UK restaurant chains, including Carluccio’s and Byron, have become casualties of the virus.

Mr Macdonald of Boisdale is worried there may be many more unless the current loan schemes become more user-friendly. “Our lending compared to Germany, France or even America has been completely abysmal. The government has to pull their finger out,” he said. “We’re now in an economic war.”

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