In a shock move just six days before Christmas, the newly-opened Virgin Hotels Glasgow on the city’s Broomielaw riverside has closed its doors, reportedly leaving 200 staff jobless.
Virgin Hotels Glasgow first opened to the public in August, following on from Virgin Hotels Edinburgh’s official opening on the city’s Victoria Street in March.
It is understood that staff were advised of the Glasgow closure in a meeting on Tuesday morning (December 19) before being escorted from the premises. The union representing workers at the hotel, Unite, has since confirmed the closure via its social media.
On its Twitter/X account, Unite said: “Our members at Virgin Hotels Glasgow have just been informed that the hotel is to close with immediate effect six days before Christmas. The CEO flew in from the US but couldn’t even answer whether workers will get paid for hours worked.”
However, the closure, whilst unexpected, did not come out of a clear blue sky. Each Virgin Hotel has an independent owner, with Richard Branson’s brand then operating the property under a hotel management agreement – and the owner of the Glasgow hotel, Lloyds Developments Limited, had fallen into administration at the start of this month.
At that time, a spokesperson for Virgin Hotels said that the administration proceedings would have no impact on trading for the 240-room hotel. “This administration process is purely about the capital structure of the property.
“It is, however, very much business as usual for the hotel and our team, and we look forward to continuing to welcome guests and build on the hotel’s success.”
Following the December 19 closure, administrators Interpath Advisory issued a statement, which read: “Geoff Jacobs and Blair Nimmo from Interpath Advisory were appointed Joint Interim Managers of Lloyds Developments Limited (‘the Company’) on 1 December 2023.
“The Company owns the property at 246 Clyde Street in Glasgow from which a hotel traded. The Company has no employees.
“There were third parties responsible for the trading and running of the hotel. Since their appointment, the strategy of the Joint Interim Managers was to understand the long-term intentions of these parties and other key stakeholders.
“The Joint Interim Managers have today been made aware that the Virgin Hotel Glasgow has unfortunately now closed, which will be immensely disappointing for all stakeholders.”
CEO of Interpath Advisory and joint interim manager, Mr Nimmo, expressed his hope that the hotel can reopen: “As joint interim managers, we have not been involved with the trading or closure of the hotel but know that this will be a worrying and disappointing time for all concerned.
“We would very much hope that the hotel – a superb development, right in the heart of Glasgow – can be opened and operational again under new ownership at some point in the future.”
The other joint interim manager, Mr Jacobs, added: “We will focus our efforts on working with stakeholders to facilitate a sale of this significant and attractive property for the benefit of the creditors of Lloyds Developments Ltd.
“Although the property is not actively on the market as yet, those with an interest should get in touch with the Joint Interim managers to register their early interest.”
The company that owns the hotel building is part of a limited liability partnership of four designated members. They are Richard Diamond and Rishipal Singh alongside Lloyds Development Ltd with a registered address in Guernsey, and Moreply Ltd, registered in London.
UPDATE: Virgin Hotels has issued the following statement clarifying its position – and stressing that its Glasgow staff will be paid for the time they have already worked this month.
”Lloyds Developments Limited – the owner of Virgin Hotels Glasgow, which Virgin Hotels has a management contract with – has financial problems and on 1 December its lenders put it into administration,” said the company’s spokesperson.
“As a result, the directors of V Hotel Glasgow Ltd, the employer and operating company in respect of the hotel, are being advised by FRP Advisory LLP as they place that company into liquidation. These financial issues mean that the hotel cannot continue operating and now has to close.
“Virgin Group tried to find solutions, including offering to purchase the hotel in order to keep the hotel open, keep the team in employment and ensure the completion of the development of the hotel, creating something the City of Glasgow could be proud of.
”Unfortunately, the lenders have not accepted Virgin’s offers and intend to pursue a sales process with the hotel closed. Virgin Hotels is very disappointed by this decision after the hard work everyone has put into the hotel and because of the impact it will have on the team that works there.
“Virgin Hotels’ heartfelt thanks and gratitude are to those employees, suppliers and guests who have been integral to the hotel’s launch in the City of Glasgow. Virgin Group and the owners are committed to ensuring employees are paid for every day they have worked this month.
“The Virgin Hotels team continues to have great ambitions for managing the hotel in Glasgow and looks forward to re-opening once a new owner is in place. No other Virgin hotel is impacted – all other Virgin Hotels remain open and operating as normal as all Virgin Hotels are independently owned.”
