The Queen’s purse has been hit by a series of business collapses including PizzaExpress and New Look, showing that even royal finances are not immune to turmoil on the UK’s high streets .
The Crown Estate, which manages the monarchy’s £ 13.4 billion commercial property portfolio in the public interest, has suffered from the restructuring of casual retailers and restaurant chains after lockdowns and pandemic restrictions hit. crushed profits, plunging many companies into administration.
The group was a creditor of large distribution chains Pizza Hut, PizzaExpress, Casual dining group and New look, according to documents filed at Companies House, all companies that have applied for voluntary company arrangements this year. CVAs are an insolvency process that allows troubled businesses to negotiate their debts with creditors.
The Crown Estate owed a total of £ 4.2million from New Look, £ 1.2million from Pizza Hut; £ 234,861 from PizzaExpress; and £ 219,150 from Casual Dining Group, owner of Bella Italia, Las Iguanas and Café Rouge, according to the documents.
In his most recent annual results, The Crown Estate has set aside £ 12.9million in bad debt provisions which are expected to arise in 2020/21 due to the fall of its tenants under administration.
The Crown Estate said: “There is no doubt that these are difficult times for the retail and food and beverage industries, and we are particularly aware of the impact this is having in many. many cases about jobs and people’s livelihoods. We work with our customers to offer them assistance where we can during this difficult time. “
The group owns large parts of shopping districts including Regent Street in London and regional shopping parks in Oxford and Northamptonshire, and join with other business owners to see drop in income attendance fell and renters’ incomes dried up.
Sarah Mook, restructuring partner at Linklaters, said retailers “took advantage of leverage with landlords to negotiate lower or different rents”, adding that CVAs “have become a tool used more widely.” Lingerie chain Ann summers Friday became the last retailer to announce plans for a CVA.
The Crown Estate returns its profits to the Treasury, which then allocates a portion of the profits to the Queen in the form of a “Sovereign Grant” to cover the upkeep of a number of palaces. In the 12 months leading up to March 31, he posted record pre-tax profits of £ 345million but has since been caught up in the crisis hitting the streets.
The group does not include the Queen’s private properties, such as Balmoral Castle and Sandringham House.
Announcing his annual results in September, Crown Estate chief executive Dan Labbad warned that this year’s performance would be significantly affected by the coronavirus, which he said would lead to “permanent structural changes” in the sectors in which the estate owns significant real estate properties, such as retail. and offices.
Last week, the two 242-year-old department stores Debenhams and retail group Arcadia collapsed, becoming the biggest victim of the pandemic in UK retailing and putting more than 25,000 jobs at risk in total. The two big brands undertook CVAs last year, but the more favorable conditions obtained through them were not sufficient to ensure their survival.