Corporate distress, jobs, Evolv, HelloFresh, RBI, Shake Shack & other:

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A DAY IN THE LIFE:

Well, we’ve made it to the end of another five-day week.

Too many of them recently and plenty more before Christmas.

But we’re almost in the final stretch. It’s Halloween today and November tomorrow and, at last, I can put the shorts away because, if truth been known, I’ve been showing a bit more leg than has been good for my health – or the digestion of anybody else unfortunate enough to clap eyes on me – recently.

Not a huge amount of news out there but have a good weekend and the best of luck to The Mighty Hull City at Norwich tomorrow.

On to the news:

PUBS & RESTAURANTS:

Corporate distress:

Begbies Traynor has produced its Red Flags report covering Q3 this year. It sums the situation up when it headlines ‘critical financial distress soars across the economy ahead of budget.’ Begbies says that the number of businesses in ”critical’ financial distress surged 78.0% year-on-year, with 55,530 companies affected in Q3 2025 (Q3 2024: 31,201).’ It adds that this was up 12.6% on the number of businesses in ‘critical’ financial distress in Q2 (which itself was up 8.6% on Q1 2025)….

• Q1 was helped by a successful Xmas 2024 and Q2 was ‘helped’ by good weather. It looks as though pretty much nothing helped Q3. Begbies reports that ‘’significant’ financial distress also increased 14.8% year-on-year.

• Consumer sectors: Begbies reports that ‘consumer-facing industries continue to be under the most severe pressure, with Leisure & Cultural Activities (+96.7%), Hotels & Accommodation (+92.5%) and General Retailers (+85.6%) experiencing some of the most extreme increases in ‘critical’ financial distress.’ Begbies partner Julie Palmer says ‚consumer-facing sectors like retail, hospitality and leisure are already in deep distress and have little capacity to absorb further shocks or pressures on consumers, while many other industries are also treading water.’ She says ‘without meaningful support, we can expect more restructuring, rising insolvencies and a continued loss of economic confidence well into 2026.’

• Putting this into context: As mentioned previously, companies tend to be on a conveyor belt. It’s either moving towards disaster or redemption. It’s rarely standing still and, at the moment, the former appears to be the case. The Q1 ‘improvement’ now seems to have been a mirage and looking forward, the conveyor belt towards corporate collapse appears to have speeded up.

• Begbies’ comment: Begbies partner Julie Palmer says ‘the steep increase in businesses in ‘critical’ financial distress shows the UK economy is in real trouble.’ She says ‘the upcoming Budget must deliver urgent support to avoid a wave of failures, especially among SMEs already operating on a knife edge.’ Inflation remains an issue, she warns, and she adds ‘many firms have no room to manoeuvre, and instead of investing for growth, are scaling back just to survive.’ She says this is ‘the opposite of what the economy needs, if it’s going to recover and grow.’

• Chairman Ric Traynor says ‘over the last 12 months, we have seen a noticeable surge in the number of companies in serious financial trouble and there appears to be little light at the end of the tunnel.’ He says ‘with confidence and investment both subdued, the challenges for businesses remain substantial.’

Employment:

With another budget coming up, accountant S&W reports that 28% of business owners intend to cut staffing levels in a continuing response to Chancellor Rachel Reeves’ £25bn tax hike on employers’ national insurance contributions in her last budget….

• As many as 19% say they would still cut staff even if measures were introduced to encourage employment in the budget.

COMPANY NEWS:

The Evolv Collection has purchased the London wine bar group Vinoteca. Vinoteca’s Farringdon and Bloomberg Arcade venues will be integrated into The Evolv Collection portfolio with Evolve CEO Martin Williams saying that ‘the acquisition of Vinoteca represents an exciting opportunity to bring together two distinguished brands with complementary DNA…’

• He says that ‘Vinoteca’s expertise in wine and neighbourhood dining aligns perfectly with our vision for Sartoria’s evolution. This strategic move allows us to introduce the elegance of Milanese dining to new audiences across London, whilst honouring what makes Vinoteca special.’

Pizza Express has said that it will open a restaurant in an iconic Hull building by Christmas. The site, which once housed Burton menswear, has been restored to its original 1930s look with owner, Wykeland, saying ‘we embarked on this challenging restoration project with the vision of saving one of Hull’s landmark buildings from dereliction, creating a thriving commercial space in the heart of the city centre.’

Meal-kit company HelloFresh has reported Q3 numbers saying that orders declined in the quarter. It has nonetheless confirmed its outlook for the year as a whole. The German-based company reported Q3 EBITDA of €40.3 million from €72.1m last year.

Amazon yesterday reported its third quarter earnings beating Wall St estimates and saying that EPS came in at $1.95 on revenue of $180.2 billion (versus expectations of EPS of $1.58 and revenue of $177.8 billion). The shares were up by as much as 13% in after-hours trading. CEO Andy Jassy told the Q3 earnings call ‘you’re going to see us continue to be very aggressive in investing in capacity because we see the demand.’

Starbucks in the US is reported set to complete 1,000 café renovations by the end of next year. The company CEO, Brian Niccol, told the company’s fiscal Q4 earnings call that there will be improved lighting, seating, and a welcoming aesthetic.

Restaurant Brands International, which owns the Tim Horton’s, Burger King, Popeyes and Firehouse Subs brands, has reported Q3 numbers saying that its consolidated system-wide sales grew 6.9% year-over-year, including 12.1% in International. It says that LFL sales growth came in at ‘4.0%, including 6.4% at BK International, 4.2% at TH Canada and 3.2% at BK US.’ The company says it ‘remains on track for 8%+ organic Adjusted Operating Income growth in 2025…’

• System-wide (including franchisee) sales were $12.3bn in Q3. Company revenue was $2.45bn against $2.29bn in the prior year. Net income from operations was $440m against $357m and EPS was up by 21.5% at 96c.

• CEO Josh Kobza says ‘our teams delivered a strong quarter, driven by momentum from Tim Hortons and our International business, which together generate roughly 70% of our earnings. Burger King also had a great quarter, outperforming most of the industry through consistent and disciplined execution of our plan.’ He adds that ‘across our businesses, our franchisees are more aligned than ever, and that partnership, combined with disciplined execution, has us firmly on track to deliver at least 8% organic Adjusted Operating Income growth this year.’

Also in the US, Shake Shack has reported Q3 numbers saying that total revenue was $367.4 million, up 15.9% versus 2024, including $352.8 million of Shack sales and $14.6 million of Licensing revenue. The group reports system-wide sales of $571.5 million, up 15.4% versus 2024. It reports net income of $13.7 million versus net loss of $11.1 million in 2024….

• Shake Shack says that it opened 13 new Company-operated Shacks and seven new licensed Shacks. CEO Rob Lynch reports the ‘we have made a lot of progress on the plan that we laid out at the beginning of 2025.’ He says ‘we have a long way to go to realise our full potential but are prioritizing initiatives that strengthen our foundation, support sustainable growth and position us well for continued long term success.’

Urban Pubs & Bars has purchased bar restaurant group Albion & East for an undisclosed sum. It says the group will acquire the business and staff of Albion & East as a whole with the four bars set to be integrated into its Urban Pubs and Bars estate….

• Urban MD Chris Hill says ‘Albion & East is a business we’ve long admired.’ He says ‘their venues share our passion for great design, fresh, high-quality food and drink, and genuine neighbourhood hospitality.’ Mr Hill says ‘we’re delighted to welcome their teams into the Urban family and look forward to supporting these outstanding venues through their next chapter.’

Heineken yesterday announced that its ‘partnership with the Champions League is coming to an end as of August 2027.’ It said that ‘after a partnership of 30 years this is of course an emotional moment for us’ adding that ‘we’ve made the strategic choice to focus our sponsorships on platforms where spend is proportionate to value creation, ensuring return on investment.’ The company says ‘we still have 2 more years to make the Champions League sponsorship big and keep the association with the Heineken brand in the minds of people for years to come.’

The Inn Collection Group, which operates pubs with rooms across Northern England, is set to use £125 million of funding supplied by HSBC to grow its footprint via the acquisition of additional sites.

Rémy Cointreau yesterday reported H1 results to end September and cut its sales guidance for the 2025-26 fiscal year as a result of tougher conditions in China and a slower than expected recovery in US sales. For its H1, the group reported sales of €489.6m, down 4.2% on the prior year.

Fish & chip shop chain Harry Ramsden’s, which is owned by Deep Blue Restaurants Limited, is to open a store set to open in London’s Notting Hill this weekend.

HOLIDAYS & LEISURE TRAVEL:

Grand Metropolitan Hotels has purchased has acquired London-based Signature Hotels for an undisclosed sum.

Boutique hotel and pub group Stay Original Co has announced the completed acquisition of The Eastbury Hotel in Sherborne, Dorset – the company’s seventh property – as it continues its growth across the South West.

CoStar reports that the US hotel industry recorded negative stats in the week to 25 October. It reports that occupancy fell by 3.6pps to 66.6% and that ADR fell by 1.7%. REVPAR was down by 5.3%.

Virgin Trains has had its application to use Temple Mills depot in Leyton to maintain and store trains to be used on the Channel Tunnel route approved. Virgin could be running cross (or rather under) Channel trains by 2030.

OTHER LEISURE:

Apple yesterday reported its Q4 numbers (to end-September), beating analysts’ expectations for both sales and profits. The shares were up around 4% in late trading. CEO Tim Cook says ‘we expect the December quarter’s revenue to be the best ever for the company and the best ever for iPhone.’ The company reported Q4 EPS of $1.85 on revenue of $102.5 billion. Wall Street analysts were reported to be looking for $1.77 on revenue of $102.2 billion.

OpenAI is said to be gearing up for an IPO that could see the company valued at $1tn for as soon as next year. OpenAI says ‘an IPO is not our focus, so we could not possibly have set a date. We are building a durable business and advancing our mission so everyone benefits from AGI [artificial general intelligence].’

Universal Music Group yesterday reported Q3 revenue of €3,021 million, up 5.3% year-over-year, or 10.2% in constant currency, with growth in all segments. Year to date revenue is up by 6.0% at €8,902 million…

• CEO Sir Lucas Grainge says ‘as we position the company for long-term value creation, we continued to achieve strong results this quarter.’ He adds ‘we continued to drive progress on our strategic plans, including our artists´ and songwriters´ creative and commercial success, our global expansion, the industry´s embrace of our responsible AI initiatives and the continued implementation of Streaming 2.0.’

Meta (Facebook, WhatsApp) yesterday reported Q3 numbers saying that it generated revenue of $51.24bn in the quarter, ahead of Wall Street estimates. EPS was $1.05, well below Wall Street expectations (of $6.70) due to a tax payment. EPS was $7.25 before the payment.

FINANCE & MARKETS:

The ECB yesterday held interest rates across the Eurozone at 2%. This was the third ‘hold’ on the trot.

Sterling mixed at $1.3148 and €1.1370. Oil up at $64.67. UK 10 year gilt yield up 1 basis point at 4.41%. World markets mixed yesterday and London set to open around 31 points lower as at 6.30am.

RETAIL WITH NICK BUBB:

Nick is taking a short break.