Britain's biggest pub company to slash jobs amid debt crunch

Telegraph

14-06-2025

Britain's biggest pub company is set to cut a raft of jobs as bosses seek to slim down the debt-laden firm following Rachel Reeves's tax raid.
Stonegate Group, which runs more than 4,000 pubs across the UK including the Slug & Lettuce and Craft Union brands, has been working with restructuring specialists at AlixPartners over recent months, The Telegraph has learnt.
Up to 150 jobs are expected to be cut across the company's head office and central functions. It is understood no decision has yet been made on the exact number of roles under threat.
Jobs in its pubs and bars will not be affected and no pubs will close as a result of the restructuring.
It comes after a difficult period for Stonegate, which is owned by TDR Capital, the private equity house which also controls Asda.
It has lost hundreds of millions of pounds while straining under the weight of a near-£3bn debt pile while higher taxes levied on employers by the Chancellor this year have added to pressures.
Despite a rise in revenues in recent years, it reported pre-tax losses of £257m and £214m in 2023 and 2024 respectively as interest payments on its debts pushed it into the red.
A Stonegate spokesman said the planned cuts were partly due to a shift away from managed pubs – which it owns and operates itself – towards leased and tenanted pubs, which are rented out to and operated by publicans.
The latter have proved more profitable for Stonegate in recent years.
Managed pubs also require more resources and head office staff to oversee, making them less appealing to run at a time when the company is trying to return to profit.
The spokesman said: 'This, combined with rising costs, particularly after the recent Budget, means we must reorganise our support functions to reflect the shape of our business today.
'We recognise that this is a difficult time and we are committed to supporting our colleagues with care and fairness as we consult with the business on the proposed changes.'
Hospitality firms have been lumbered with extra costs after Ms Reeves raised employers' National Insurance contributions and lowered the threshold at which they are paid this year.
Bosses have argued the latter has disproportionately hurt hospitality firms because of the number of lower-paid and part-time workers they employ.
It will be the second round of job cuts at Stonegate in two years following more than 250 redundancies in 2023. Stonegate has also been reviewing rents and agreements with suppliers as part of restructuring efforts.
Last summer, TDR pumped £250m into the company to avoid defaulting on its debts, after the cost of servicing its borrowings rose from £301m to £450m in 2024. This included refinancing.
The refinancing gave Stonegate breathing room, allowing it to push the repayment date for much of its debts to 2029.
At the time, Stonegate said the deal would allow it to invest more in its pubs. The agreement saw one of its lenders, AlbaCore Capital Group, take a stake in the firm.
Domiciled in the Cayman Islands, Stonegate traces its history back to 2010, when TDR bought 333 pubs from Toby Carvery owner Mitchells & Butlers.
Its debts ballooned when it bought rival pub firm Ei Group – formerly Enterprise Inns – in a £3bn deal in 2019. The deal completed just before the pandemic forced the nation's pubs shut for months on end.
After the pandemic, soaring interest rates heaped pressure on firms with large debts.
Stonegate's troubles echo those of TDR-owned Asda, which too has been battling to bring down costs in the wake of its debt-fuelled buyout by the firm and the billionaire Issa brothers in 2021.