Abokado launches CVA blaming 'bank fraud' and sales decline

By James McAllister

- Last updated on GMT

Abokado launches CVA blaming 'bank fraud' and sales decline

Related tags: Casual dining, CVA, Restaurant

London healthy eating chain Abokado is the latest restaurant group to launch a Company Voluntary Arrangement (CVA).

The company says it has seen a sharp reduction in sales and suffered a ‘significant sophisticated online banking fraud' in July.

It adds that while the core Abokado estate continues to trade well, a number of underperforming sites ‘threaten the survival of the whole business’.

At present it is unclear how many sites the brand proposes to close under the CVA.

Abokado says it took steps to mitigate cost pressures, intense competition and the impact of weakening consumer confidence in 2016-17, leading to ‘record profits’ during the year to March 2018.

The chain continued to perform well in the 12 months to 31 March 2019 with like for like sales up 3% for the year as a whole.

However, the company says it experienced a softening in sales from Autumn 2018 onwards.

In July the business fell victim to a 'sophisticated online banking fraud' that materially impacted working capital and compounded the trading issues.

The fraud is subject to investigation, but the directors consider it unlikely that there will be any recovery.

The directors say they have undertaken a number of measures across 2019 to improve performance, including further cost reduction and margin improvement plans.

“Over the last three years my team have proactively addressed the market conditions and we considered Abokado was in a good position,” says Abokado CEO Mark Lilley.

“The market dynamics during 2019 were unanticipated and their impact has been further compounded by the recent fraud.

“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.”

Abokado was founded by Lilley and his wife Lindsay in 2004, and currently operates 23 sites across the capital.

Related topics: Business

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