Three Black Sheep Brewery pubs closed with immediate effect in Leeds and York

The Black Sheep Tap & Kitchen in Chapel Allerton and Mr. Foleys in Leeds city centre along with The Last Drop Inn in York have all been shut.

The firm’s one remaining pub, The Three Legged Mare in York, will be remaining open.

It follows London investment firm Breal Capital buying Black Sheep Brewery in May for £5m in a pre-pack administration deal.

At the time, around 73 people worked in its retail pubs, with a further 73 in the Masham-based brewery arm of the business.

The number of jobs lost from the pub closures have yet to be confirmed but a statement from Black Sheep to The Yorkshire Post has also said there will also be a “small number of redundancies associated with the company’s retail arm at the head office in Masham”.

A company spokesman said: “Having recently conducted an extensive review of our business, we have explored every angle to try to keep these locations trading profitably, but without success.

"Unfortunately, the only avenue left for us was the closure of these premises. It is always the last resort for us to make redundancies, and we are saddened to see such dedicated colleagues leaving us, at this time.”

Despite the closures, the company statement suggested Black Sheep may open new pubs. It said: “The Black Sheep Brewing Company Ltd are committed to the growth of the retail estate and are seeking profitable outlets that complement the Black Sheep brand and ethos.”

A statement from the landlords of The Last Drop Inn on Facebook said of the closure: “We are beyond upset. Our little pub, that we built from a shell of a building, has to close. We had no idea this was happening and so, we had no way of saying goodbye to our amazing, lovely customers, who have helped shape this building from a pub into a community.”

The statement added they were “eternally grateful” to Black Sheep Brewery for allowing them to take the pub on and also thanked staff.

"Every single person we have hired has made this place what it is, being past or present staff members. You’ve all been amazing and I hope that wherever we go next, I sincerely hope you’ll join us.”

The closure of The Black Sheep Tap & Kitchen in Leeds has also impacted burger business Slap & Pickle which moved into the site earlier this year.

Late last year, Slap and Pickle owner James Tabor issued a public appeal for a new home in an attempt to keep his staff employed due to the closure of the Beer Hawk bar in Boar Lane where they had been based.

Its other Leeds city centre location, Assembly Underground on Great George Street, also closed late last year.

In a video statement on Facebook, Mr Tabor said: “It is one of those things that happens and is the nature of our business when we don’t own the bar.

"Whatever happens to the bar is what happens to us. Watch this space, we are going to try and do what we can to get another site really quickly and I have a couple of irons in the fire.

"I understand why Black Sheep are having to do what they are having to do, they’ve had all sorts of stuff going on. But we are working on stuff – stay with us, keep the faith, all is not lost.”

The Black Sheep sale in a pre-pack administration deal followed the company making a £1.6m loss in 2022/23 as it struggled with the fallout from the pandemic and rising costs.

A recent report by administrator Teneo Financial Advisory has revealed creditors are collectively owed more than £6m – much of which is unlikely to be ever repaid. The change in ownership also saw the company change structure from being a public listed company to a private limited company – affecting around 1,000 existing shareholders. CEO Charlene Lyons said that a “local employment catastrophe” had been averted by the deal.

The outstanding money includes a large proportion of two Government-backed Covid loans taken out by the brewery; one of which was only taken out last summer.

In August 2020, it took out a £3.125m Coronavirus Business Interruption Loan Scheme (CBILS) and in July 2022, took out a further £1.6m from the Recovery Loan Scheme (RLS) initiative.

The report revealed that £2.5m of the CBILS loan and all £1.6m of the RLS loan remained outstanding at the time of administration. As part of the sale a further £373,000 has been repaid to lender Close, leaving around £3.7m outstanding. The report said that “whilst further distributions will be made, Close will not be repaid in full”.

Both loans are backed by the Government, meaning 80 per cent of the outstanding CBILS money and 70 per cent of the RLS loan will be covered by the state.

HMRC is also owed £1.2m from the brewery side of the business and £135,000 from the retail pub side. The report said the £135,000 is not set to be repaid and the £1.2m is unlikely to be repaid in full.

The report also stated unsecured creditors are collectively owed £1.4m – money that will not be returned. The report lists 376 organisations that are owed money.