Buzz Bingo to Close Over a Fourth of Its UK Locations

Buzz Bingo is shutting down more than a fourth of its locations in the United Kingdom – iGB

Buzz Bingo is permanently closing over a fourth of its bingo halls in the UK, leading to the loss of over 500 positions.

The operator – previously known as Gala Bingo – declared that 26 of its 91 bingo venues across the UK will be closing due to what the company anticipates to be an “unsustainable operating atmosphere” in the foreseeable future.

Around 3,400 of the company’s 573 workers will be potentially impacted by the decision, with most having been on leave since Buzz Bingo’s venues closed on March 21st due to the coronavirus (Covid-19) outbreak.

Buzz Bingo released these details as part of a Company Voluntary Arrangement (CVA) after a period of productive discussions with various stakeholders, including property owners. The company stated it has reached agreements with property owners to better align rents on specific clubs to reflect anticipated trading.

Buzz Bingo’s owner, Caledonia Investments, has indicated its willingness to provide an additional £22 million of equity capital upon the CVA’s effectiveness, following its £5 million investment in Buzz Bingo in May 2020.

The ongoing health crisis has had a considerable effect on the entire entertainment and hospitality sector, and a direct and substantial impact on Buzz Bingo’s operations, according to CEO Chris Matthews.

Matthews stated: “After a thorough examination of our options, the proposed restructuring plan will reorganize our retail network to ensure we are well-prepared for expansion, while adjusting to the ongoing difficult circumstances as we begin to reopen most of our clubs.”

“Our financial backers are supporting our plans, and our proprietors, Caledonia, will be investing in the new framework to further bolster our future business.”

“The restructuring will unfortunately affect some of our staff members, and my top priority is to assist all those impacted and keep them fully informed as we progress through this process. I want to express my gratitude to each and every one of our colleagues for their continued comprehension and dedication during this period.”

Buzz Bingo stated they will be seeking approval from creditors for the restructuring plan proposal, which is scheduled for August 3rd. Online operations will continue as usual during this time.

The majority of Buzz Bingo clubs will resume operations on August 6th, with the operator expressing their eagerness to secure a sustainable long-term future for the company and its remaining 2,800 employees. Bingo halls in Edinburgh Wester Hailes, Milton Keynes, Salford and Wolverhampton will cease operations.

Buzz Bingo has been striving to lessen the effects of the lockdown by trimming expenses, lowering executive compensation, and utilizing government layoff programs.

The company stated in a press release: “Despite these efforts, Buzz Bingo’s daily operations and its capacity to generate income from its retail club network have been severely affected.”

“Management is convinced that the proposed CVA presents the most favorable outcome for all of Buzz Bingo’s stakeholders, as it seeks to ensure a sustainable long-term future for the business and its remaining workforce.”

In 2018, Gala Leisure finished a £40 million (€46 million/$53 million) makeover of its Gala Bingo division, rebranding it as Buzz Bingo and rebranding its website and roughly 100 locations. This followed the acquisition of the division from Gala Coral Group by investment trust company Caledonia Investments for a total consideration of £241 million in 2015.

Melanie Leech, Chief Executive of the British Property Federation (BPF), stated that the organization worked closely with Buzz Bingo to develop the CVA plan. The BPF is the industry association for residential and commercial property companies in the UK.

She said: “These situations are never simple, particularly in the current economic environment, for our retail, hospitality and entertainment businesses on our high streets, who are on the front lines of the COVID-19 pandemic.”

Property owners should consider the impact of a CVA proposition on those who invest, including numerous individuals who have invested their savings and retirement funds in commercial property.

Buzz Group and AlixPartners consulted with the BPF prior to presenting the CVA proposal. This provided an opportunity to comprehend the concerns of property owners, but ultimately, the decision of how to vote on the CVA rests with each individual property owner.