XP Factory, the parent company of Boom Battle Bar, has announced a significant reduction in its expansion plans due to challenging market conditions that have resulted in a notable decline in consumer spending. The news, released on February 2, 2026, prompted a sharp drop in the company’s share price, reflecting investor concerns over its financial outlook.
Sales Decline and Strategic Adjustments
In its latest financial report, XP Factory revealed that it anticipates falling short of both sales and profit projections, attributing this to a difficult trading environment. The leisure group, which operates a chain of experiential venues including the popular Boom Battle Bar, noted that while overall sales at its Boom locations increased by 2.5%, this figure was overshadowed by a more alarming 7.2% drop in like-for-like sales during the 13-week period ending December 28, compared to the previous year.
Despite a slight uptick in overall sales, the festive season did not bring the expected boost, with strong corporate bookings failing to compensate for the drop in individual consumer spending. The Boom Battle Bar brand, featuring activities such as augmented reality darts and Bavarian axe throwing, has been particularly vulnerable to these market pressures.
Mixed Performance Across Brands
Conversely, XP Factory’s Escape Hunt venues have shown resilience, with total sales rising by 10% and like-for-like growth at 6.4%. This success has been bolstered by new openings in Canterbury and Sheffield, showcasing the potential for growth within this segment of the market. Nevertheless, the company has decided to “moderate” the pace of new openings across its brands due to the prevailing uncertainty in consumer confidence and spending patterns.
The firm remains optimistic about the Escape Hunt brand, which it believes can expand to approximately 100 locations across the UK, despite the current economic climate. This cautious approach reflects a strategic pivot towards stability in a market beset by challenges.
Financial Outlook and Operational Challenges
XP Factory’s financial projections for the current fiscal year indicate that revenues and earnings are now expected to fall below targets. The company has forecast earnings before interest, tax, depreciation, and amortisation (EBITDA) to be between £5 million and £6 million. Factors contributing to this downturn include the rising costs associated with the national living wage and national insurance contributions, which the company has struggled to fully offset amidst weakening consumer demand.
Richard Harpham, the Chief Executive Officer of XP Factory, commented on the situation, stating, “Against a backdrop of well-documented industry challenges, we have continued to outperform the wider experiential leisure market and make progress against our strategic objectives. While near-term trading within Boom has been impacted by market pressures, with strong market positions and a compelling UK growth runway, we remain well positioned to emerge as a long-term winner as the sector continues to consolidate.”
The company’s shares plummeted by 16.6% to 11.68p in early trading following the announcement, reflecting investor apprehension regarding the firm’s ability to navigate these economic headwinds.
Why it Matters
The decision to slow down expansion plans amid declining sales raises significant questions about the resilience of the experiential leisure sector in the face of economic uncertainty. As consumer confidence wanes, companies like XP Factory must adapt their strategies to safeguard profitability while ensuring sustainable growth. This situation may serve as a bellwether for the wider industry, highlighting the delicate balance between expansion aspirations and the realities of shifting consumer behaviour in a challenging economic landscape. The implications of these developments extend beyond the company itself, potentially influencing investment trends and shaping the future of leisure and entertainment in the UK.
