Wetherspoon set to reopen pubs and hotels ‘in or around June’ despite no current government plan to lift lockdown

Pub chain hopes large venues will help punters stick to social distancing guidelines as founder revealed scale of carnage lockdown has caused his business

Will Kirby
Wednesday 29 April 2020 18:33
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'I completely understand' Wetherspoons owner Tim Martin sends video message to staff encouraging them to work for Tesco

Wetherspoon is set to reopen its pubs and hotels “in or around June’’, the company has announced, despite there being no current government plans to ease lockdown restrictions.

In an after-hours stock market announcement, the business said: “The company is likely to make some changes to its operating model, assuming increased social distancing, and anticipates a gradual recovery in customer numbers.

“Wetherspoon pubs are substantially larger than average, and most have outside facilities. The company believes these factors are likely to assist if social distancing measures apply.”

Mr Martin also revealed the government’s business rates holiday has saved his firm around £60m and he is looking at applying for a Bank of England loan for large companies.

However, the loan may not be possible due to Wetherspoon’s not being an ”investment grade” business on some measures, the company said.

To stem the flow of cash leaving the company, shareholders will also be tapped up for around £141m through a fundraiser by issuing new shares.

Wetherspoon’s said: “The UK government ordered the closure of pubs on 20 March 2020, from which point the company’s sales have been zero.”

The chain’s boss, Tim Martin, has been highly critical of the lockdown measures, describing the restrictions as “over the top” and suggesting last month, without evidence, that “there’s hardly been any transmission of the virus within pubs“.

The plans are likely to be resisted by the government, which has so far refused to unveil plans to ease the lockdown until ministers know the “real risk” of a second peak of infections can be avoided.

Following the closures, Mr Martin announced that staff would only be paid by the company until the moment the pubs were shut, instead, they would be paid through the government's furlough scheme. Mr Martin also advised them to look for work at Tesco if they needed employment in the meantime. He later backtracked after public outcry.

New pub openings have been put on hold and are not expected to restart until 2022, with around five a year from then.

Mr Martin’s firm also revealed it has paid suppliers due at the end of March, with 83 per cent paid in full and extended payment terms agreed with a number of larger suppliers. However, the majority of rents due in March were deferred.

The founder said he will take a 50 per cent voluntary pay cut, along with chief executive John Hutson. Other directors have agreed to similar cuts.

He said: “The Covid-19 outbreak is having a severe impact on the UK pub sector. In these challenging times, I would like to thank everyone at the company, its suppliers, landlords, banks and the government for their support and commitment.

“We’ve had to take significant action to reduce costs, decisions which have not been taken lightly. We look forward to reopening our pubs and hotels and welcoming back our teams in the near future.”

Pubs, bars and restaurants across the UK have been closed since 20 March, and the government has confirmed that areas of hospitality will be among the last to exit the lockdown.

Venues that have flouted the order to close have been fined, and in some cases, their licences have been suspended.

Ministers are reportedly concerned that some people would behave inappropriately as soon as lockdown is ended, and the difficulties in enforcing social distancing guidelines in pubs means they could become a hotbed for the coronavirus spread.

Meanwhile, MPs were warned last week that pubs, hotels and restaurants could face a “bloodbath” as the coronavirus lockdown is lifted, with up to a third of the sector at risk of closing down.

UKHospitality chief executive Kate Nicholls called for urgent action to defer rent payments that have built up during the outbreak and to extend the employee furlough scheme for premises which may be forced to continue social-distancing measures as late as Christmas, long after the rest of the country has left lockdown.

Update, 21 August 2020

A representative of Wetherspoons contacted us following publication of this article to say that at no time did Mr Martin tell employees that Wetherspoons would not continue to pay them. It is accepted that all staff were paid by Wetherspoons up until the point of pub closures, after which staff received furlough pay.

In addition, we are happy to clarify that Mr Martin did not direct staff that they “should work at Tesco instead”. The actual words Mr Martin used to staff were: “We’ve had lots of calls from supermarkets, Tesco alone want 20,000 people to join them, that’s half the number of people who work in our pubs... If you’re offered a job in a supermarket many of you will want to do that, if you think it’s a good idea to do it, I can completely understand it.”

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