Hub Box burger chain sold after going into administration

-Credit: (Image: Google Maps)
-Credit: (Image: Google Maps)

South West burger chain Hub Box has been acquired by a new owner following its fall into administration. The deal ensures that all 10 of its restaurants will remain operational and approximately 300 jobs have been preserved.

The company, which is headquartered in Cornwall, has been hit hard by inflation, labour costs and interest rate increases. In January, it reported a loss of £1.256m and disclosed that it had to request nearly £500,000 from shareholders to sustain the business through the winter season.

On July 11, the company entered administration but was promptly sold in a pre-pack agreement to South West Restaurants Limited. The administrators stated that this deal has secured the future of Hub Box.

The restaurants located in Truro, St Ives, Pentewan, Falmouth, Exeter, Cardiff, Cheltenham, Dorchester, Taunton and Portsmouth will continue their operations and all employees will be transferred to the new owner. Hub Box has been collaborating with advisers from Interpath Advisory to explore investment options that could maintain its operation and facilitate expansion.

However, the advisors noted that despite witnessing consistent revenue growth over the past three years, the company has recently been affected by escalating food, energy, interest and labour costs. With increasing pressure on cash flow, the directors sought to explore investment options, including a potential sale of the business.

Hub Box Ltd, entered administration on July 11, after failing to find a solvent solution. Tasked with the role of joint administrators were Steve Absolom and Will Wright from Interpath Advisory.

Directly following their appointment, they orchestrated the sale of the business and its assets to South West Restaurants Limited. Commenting on the situation, Sam Birchall, head of special situations at Interpath Advisory, who spearheaded the transaction stated: "Hub Box has grown a loyal customer base in the South West but, like many other casual dining operators, has been hit hard in recent years by high cost inflation."

"We're pleased to have secured this transaction which safeguards the future of the brand and which, importantly, preserves employment for 300 staff. We wish all at the company the best for the future."

The burger chain, Hub Box, initially started trading in 2012 out of a shipping container as a Christmas pop-up. The business rapidly expanded to an 11 restaurant operation, including in Exeter where it started in Sidwell Street before moving to its current home in Catherine Street, a much bigger site with an open terrace overlooking the Cathedral.

Co-founders of Loungers, Alex Reilley, serving as Chairman, and Jake Bishop were included among the directors of the company. Despite seeing an increase in turnover to £14.88m from £12.32m in 2021, the firm found it challenging to stay afloat.

However, the firm reported a pre-tax loss of £1.148m, a significant increase from the previous year's loss of £282,000. The total loss for the financial year amounted to £1.256m.

The company was forced to halt the opening of new restaurants and was left with an unoccupied unit in Barnstaple, which it chose not to convert into a restaurant but still had to pay rent for. When Hub Box launched its new eateries in Plymouth's Royal William Yard and Dorchester, both were affected by escalating construction costs.

Electricity bills also rose in October 2022, necessitating cuts at the Truro head office.