One of the City's favourite purveyors of liquid refreshment, the wine-bar chain Balls Brothers, has collapsed into administration after struggling with debts of £7m owed to Barclays Bank.
Balls Brothers owns 19 restaurants and wine bars, which have been the venue for long lunches, after-work shenanigans and discreet deal-making negotiations for generations of bankers in the Square Mile.
A restructuring firm, Zolfo Cooper, was appointed as administrator late on Friday with a mandate to find a buyer to rescue the business. Zolfo said the Balls Brothers chain would continue trading, with no immediate job losses among the 332-strong workforce.
"The Balls Brothers business has been an established name for over 50 years and is extremely well known across the London leisure and dining sector," said Nick Cropper of Zolfo Cooper. "The company has a great heritage and enjoys a lasting reputation due to its high standards in service, food and wine, and is sure to generate significant interest."
Known for its long list of vintage wines and for its swift trade in champagne to traders celebrating lucrative deals, Balls Brothers was founded 150 years ago as a wine merchant, operating off-licences in London and the south-east. It began concentrating on City wine bars in the 1960s.
Balls Brothers' difficulties arose, in part, from a deal to buy a rival bar chain, Lewis & Clarke, for £14m four years ago. Insiders say Balls Brothers' management struggled to integrate Lewis & Clarke, which operates more casual venues, some of which have outside space, in contrast to Balls' traditional cellar-like establishments. The deal involved the assumption of considerable debt – and it came shortly before the City's worst financial crisis in living memory. Accounts filed at Companies House show that Balls Brothers made a £224,000 loss in the year to January 2009.
Speaking earlier in the year, Balls Brothers' chairman, Richard Balls, bemoaned the decline of long lunches in the City.
"A lot of people who still have jobs have had a lot less time. That's affected lunches – people are staying at their desks more," said Balls. "Things like long liquid lunches, which have been drifting down for 20 years, will keep on doing so."
Relations between Balls Brothers' founding family and Barclays have since deteriorated. Zolfo Cooper has been involved for several months as an adviser unsuccessfully seeking new investors.
Rumours of difficulties at Balls Brothers emerged earlier in the week, causing concern among the chain's drinks suppliers, who became alarmed about being left as creditors. Since the collapse of Bear Stearns and Lehman Brothers in 2008, City wine bars have faced a more subdued environment in the financial community, with bankers wary of overt champagne-quaffing antics against a backdrop of recession and popular outrage over bonuses.