The Stonegate cafe, in the heart of York, will not reopen after being deemed no longer financially viable, managing director Simon Eyles revealed.
A total of 34 employees will be impacted by the closure of the popular tearoom, known as Little Bettys.
Mr Eyles told The Yorkshire Post that efforts were ongoing to redeploy the affected staff to other parts of the Harrogate-based business.
A programme of voluntary redundancies has been launched at the two Bettys sites in the city, and it is hoped that compulsory redundancies will be avoided.
None of the 100-year-old company’s other tearooms are at risk of closing down, Mr Eyles confirmed.
He said: “It’s with a heavy heart that we’re announcing that the café at Bettys Stonegate, York, will be closing for good.
“The branch shop is staying open and none of our other branches are affected.”
‘Increasingly challenging environment to work in’
“Our Stonegate café is the smallest of our cafés, housed in a unique, historic building, full of charm,” Mr Eyles added.
“But its layout has become an increasingly challenging environment to work in.
“Over the last few years, we’ve tried several different ways to make it work better for our people, our customers and our business.
“Unhappily, we haven’t been able to find a formula that fits.
“We’re working now to redeploy as many people as possible and doing everything we can to avoid compulsory redundancies.”
While the company confirmed that the Covid-19 pandemic has had a “significant impact” on its business with the Stonegate café being closed since March last year, a spokeswoman stressed that the coronavirus crisis has not been the trigger for the closure.
Other Bettys tearooms will continue to operate
The five other Bettys tearooms in Harrogate, Harlow Carr, Ilkley and Northallerton as well as the main cafe in York will continue to operate.
The ground-floor shop in Bettys Stonegate will re-open, although the upstairs tearooms, which could accommodate 60 customers across 20 tables, is closing.
A second branch opened in York in 1965, and the Stonegate tearooms was initially run by Bettys’ sister company, the tea and coffee merchants Taylors of Harrogate.
It became a Bettys in 1999, initially known as Little Bettys before being rebranded as Bettys Stonegate in 2011.
‘We need to adapt and change’
The spokeswoman said: “Bettys is a 100-year-old family business and our history has shown us that we need to adapt and change, from closing branches in Leeds or Bradford, to moving Bettys Harrogate and opening branches in Northallerton, Ilkley and Harlow Carr.
“Over the last few years, we’ve been looking at how to make Bettys stronger for the future – and that process, rather than the impact of the pandemic, which has led to our Stonegate decision.”
While the company has declined to disclose whether Bettys Stonegate had remained a profitable element of the business, the spokeswoman stressed that the closure had not been driven by a cost-cutting exercise.
She added: “The closure hasn’t been driven by the pandemic or a cost-cutting exercise. It’s about strengthening our business for the long-term future.”