London's restaurant market is in desperate straits, but owners of innovative drinking holes are still making money, according to a series of results published this week.

Inventive Leisure, owner of the Revolution chain of vodka bars, said it saw a sharp leap in sales in the year to June and is pushing ahead with expansion.

Meanwhile Groupe Chez Gerard, which runs the Livebait and Chez Gerard restaurant chains, is shutting down outlets in the hope of staying afloat in an increasingly competitive market.

The firm said it was open to takeover offers.

Inventive approach

Inventive Leisure reported a 36% rise in profits in the year to June as it continued to expand southwards from its Manchester base.

The company, which now operates almost 40 bars, said the proportion of vodka-based cocktails had risen from 32% to 36% of sales in the last year.

I'm sure young people will always continue to consume vast quantities of vodka

Nigel Popham, Teather & Greenwood

Overall sales of vodka were also up over 13%.

Inventive plans to open between 10 and 12 Revolution bars per year, with a target of 120 outlets.

It said since June "sales and profits [are] substantially ahead of the equivalent period last year," and that there was a strong pipeline of new sites ready.

Fishy business

Groupe Chez Gerard, by contrast, is scaling back its operations after another poor year.

The restaurant group operates its namesake Chez Gerard steak-frites restaurants, the fish chain Livebait, and a cluster of one-off restaurants including Bertorelli's and Soho Soho.

But it has seen its profits tumble in the last eighteen months, blaming the foot and mouth crisis, rapid expansion and slowing tourism.

In the year to June 2002, the group incurred a loss of �3.4m compared with a profit of �2m the year before.

Almost all of this came from the cost of closing five restaurants, as part of a company-wide restructuring to cuts its debt.

"Trading is even tougher at the moment," admitted chairman Neville Abraham, adding that the company would consider a bid if someone came forward.

High street battle

The poor appetite was echoed by rival restaurant group Signature Restaurants, owner of the Belgo and Strada chains as well as the Ivy restaurant.

Signature was forced to close six restaurants from its portfolio in the year to June and is also in discussions about a possible takeover.

Nigel Popham, leisure analyst at Teather & Greenwood, told the BBC that "the market overall is tough", with "too many restaurants chasing too few people".

Mr Popham added that in difficult economic conditions, "eating out is expensive and time consuming".

But he said Inventive Leisure was still likely to flourish: "I'm sure young people will always continue to consume vast quantities of vodka."