In yet another devastating blow to the casual dining sector, The Restaurant Group (TRG) has confirmed that it is to close 125 Frankie & Benny’s restaurants, with the loss of an estimated 3000 jobs.
The firm behind Chiquito and Wagamama says it will enter into a company voluntary arrangement (CVA) allowing for the business to be restructured with the closure of unprofitable restaurants.
The company says the CVA will accelerate its previously announced plans to close 90 stores by 2021.
If the CVA is approved by creditors TRG’s leisure portfolio will reduce to 160 sites, with negotiated improved rent or lease terms agreed in relation to 85 of these.
The CVA will also see the group escape leases on a further 25 previously closed sites, which it has said will help ensure “a long-term sustainable business for all stakeholders”.
Chief executive Andy Hornby 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. I would like to wholeheartedly thank all of my TRG colleagues for their continued understanding and extraordinary commitment during this unprecedented period.”
The British Property Federation said it had been talking to The Restaurant Group before it proposed the CVA, but it would be up to individual landlords to decide how to vote on the deal.
The federation’s chief executive Melanie Leech, said: “These situations are never easy, particularly now for the retail and hospitality businesses on our high streets at the sharp end of the Covid-19 pandemic.
“Property owners, however, need to take into consideration the impact on their investors, including the millions of people whose savings and pensions are invested in commercial property, as they vote on any CVA proposal.”