The owners of the Fife Arms hotel in Braemar have reported a loss of £ 11.6million, following financial woes made worse by the pandemic.
The Fife Arms Hotel and Invercauld Arms are owned by the husband and wife of Swiss art dealers Ian and Manuela Wirth, who acquired the companies in 2018.
The Fife Arms has been popular with royalty and celebrities, with Prince Charles and Sam Heughan of Outlander among its guests, and features original paintings by Pablo Picasso, among others.
The properties are structured within a subsidiary of their company Artfarm, of which Baron Meryvn Davies is one of its directors.
Invercauld Arms was listed as dissolved on Companies House on November 30. However, according to Artfarm’s annual report, on July 17, it was part of a restructuring of the group to bring it together under a single entity.
The Invercauld Arms hotel has been temporarily closed for renovations. He reported a loss of £ 390,766 in his 2020 accounts.
Other records on Companies House show the Wirths planned to dissolve many of their other hotel accounts, but stopped the process in October.
Artfarm announced a loss for the year to December 2020 of £ 11.6million, spending £ 5.8million on administrative expenses and £ 7million on restructuring the group which has seen its hotels go under one book. The accounts also noted an overall loss of £ 15.3million.
In June 2019, Artfarm secured a £ 3.5million unsecured Series A loan in Bretton Investment Partnership, as part of a joint venture that saw the company acquire a 50% stake.
The Wirths have ‘ambitious’ expansion plans for the company, aimed at ‘redefining culture-driven development’, stressing that this is a capital-intensive operation and should pay back shorter-term losses within 20 to 30 years.
The company was able to survive the “significant challenges” caused by the pandemic by using government support programs. It has gross assets of £ 46million, with 268 employees across all of its hospitality locations.
The accounts noted that The Fife Arms has been trading “successfully” since its reopening, with occupancy rising from 50% in 2019 to 55% in 2020.
A spokesperson for Artfarm said: “We can confirm that we have recently successfully completed a restructuring of our statutory entities resulting in one main operating company: Artfarm.
“We can confirm that the Invercauld Arms is currently closed while it is undergoing refurbishment. “
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