The restaurant and bar scene veteran Luke Johnson is pumping £1.5m into Eclectic Bar Group, the bar chain that is struggling thanks to more responsible habits among its student clientele.
The entrepreneur, who made his name in hospitality with Pizza Express more than 20 years ago, will also become executive chairman of the bar group, which owns the Po Na Na and Embargo Republica brands.
Eclectic Bar Group, which owns 19 bars in student towns and cities around the country, has blamed a slump in trading on more responsible students, who are no longer rushing to cut-price “student nights” at the start of the week.
Three of the company’s bars – in Bournemouth, Brighton and Norwich – have been closed or sold as competition for drinkers takes its toll.
Mr Johnson is paying 50p each for 3 million shares – which will give him an 18.5 per cent stake in the company, subject to an extraordinary general meeting.
Reuben Harley, the chief executive, will stay in his role and is also increasing his stake in the company.
In a trading update, the AIM-listed bar group blamed competitive pressures in a number of locations and said it would put a cost-cutting programme in place immediately. It also warned that current trading was likely to have an impact on the full-year results.
Two new sites, in Sheffield and Liverpool, have been put on hold until at least September, when Eclectic reports its annual profits.
Eclectic listed on the Alternative Investment Market in 2013 at 162.5p a share. They ended up 14p, or 29 per cent, yesterday at 62.5p.Reuse content