The UK operator of TGI Fridays has gone into administration as the hospitality firm seeks
to sell its chain of 87 restaurants across the country, which if successful will secure up to 3,000 jobs employed with the chain.
The American-themed diner opened its first UK restaurant in 1986 and went on to become a popular destination for cocktail nights and birthday parties, but its collapse comes after a deal to buy it for £177million fell through earlier this month, due to a management change that would have prevented Hostmore from collecting royalties on the TGI Fridays brand.
Hostmore, which is listed on the London stock market, said administrators from advisory firm Teneo would be appointed and its restaurants sold off to rivals. The restaurants will continue to operate as normal in the interim.
Hostmore said the sale, which will complete by the end of the month, would generate less than its debts and it was suspending trading of its shares, whose value has fallen to almost zero. The company has debts of up to £35m.
In a stock market update earlier this month, Hostmore said sales so far this year are 12 per cent lower than the same period last year, blaming ‘persistent warmer weather than the comparative period in 2023 and underlying weak consumer spending’.
A statement issued to the London Stock Exchange, Hostmore said:
“The board is immensely proud of all Hostmore colleagues, both in store and in the support centre, who worked tirelessly to execute a turnaround programme over the past 18 months and to deliver a successful result on the proposed acquisition of TGI Fridays, Inc.
“The board inherited a very challenging set of circumstances, but a focus on reducing costs, revising the group’s capital allocation policy and implementing both board and senior management changes, meant that the group was able to reduce annualised expenditures by £12million, significantly reduce losses from unprofitable stores, and operate the group’s stores at a best in class efficiency level for the sector, all while improving guest scores to our highest levels on record.
“Unfortunately, all of the board’s efforts to implement a lasting solution to support the long-term financial future of the business came against a highly challenging trading and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well-advanced, encountered adverse events outside of the board’s control.”
