After days of speculation, the owner of the Frankie & Benny’s, Garfunkel’s and Wagamama restaurant chains has outlined proposals to reduce the size of its estate and rental costs by the implementing a company voluntary arrangement (CVA).
The CVA will relate to The Restaurant Group’s TRG UK division which comprises mainly of the Frankie & Benny’s chain. Its Wagamama, airport concessions and pub operations will be unaffected.
The CVA will allow it to restructure its business by closing unprofitable restaurants and support its recovery after being hit hard by the coronavirus lockdown.
Around 125 sites will be shut permanently with the group seeking improved rental terms from landlords on 85 of the remaining restaurants. The closure will impact around 3,000 jobs
If the CVA is approved, it will leave the group’s Leisure business with approximately 160 sites.
The restructuring accelerates the group’s previously announced plans to close 90 stores by the end of 2021.
The Restaurant Group stated that the proposals aimed to ensure it had a long-term sustainable business in the face of “unprecedented disruption” to the UK’s casual dining sector.
Andy Hornby, Chief Executive said: “The issues facing our sector are well documented and we have already taken decisive action to improve our liquidity, reduce our cost base and downsize our operations.
“The proposed CVA will deliver an appropriately-sized estate for our Leisure business to ensure we are well positioned despite the very challenging market conditions facing the casual dining sector.”
NAM Implications:
- TRG pushing all the necessary buttons…
- …and cutting to fit their perception of the new market, thus far.
- This has to be a pointer for hospitality…
- …and their suppliers.
- Fingers crossed this is sufficient.
