The Restaurant Group has confirmed that it will cut up to 3,000 jobs and close 125 Frankie & Benny’s restaurants.
The firm behind Chiquito and Wagamama says it will enter into a insolvency procedure known as ‘company voluntary arrangement’ that will allow it to restructure its business by closing some unprofitable restaurants.
The company says the CVA will accelerate its previously announced plans to close 90 stores by 2021.
Restaurants in the UK have remained shut since the UK went into lockdown on March 23 – and many are unlikely to reopen in July due to the financial stress caused by the coronavirus pandemic.
Andy Hornby, chief executive of The Restaurant Group (TRG) said the move will better position the company amid the “challenging market conditions facing the casual dining sector”.
He 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.
“I would like to wholeheartedly thank all of my TRG colleagues for their continued understanding and extraordinary commitment during this unprecedented period.”
In a statement to stock exchange, TRG said it will continue to seek rent reduction with its landlords at 85 sites that are currently “underperforming” or are on “unfavourable lease terms”.
The Restaurant Group closed 18 outlets last year as its Chiquito and Frankie & Benny’s brands continued to struggle against a backdrop of weaker consumer spending in the casual dining sector.
Wagamama, the asian cuisine restaurant chain, remains one of the profitable brands owned by TRG and is unaffected by the ongoing restructuring. It was acquired in 2018 for £559m and has been credit for turning the company’s fortunes around.
Alongside its annual results in February the company said it planned to convert 12 sites into a Wagamama brand in the current year – building on its growing contribution to group sales.
The company says it will continue to look at options to convert its restaurants to Wagamama where appropriate.
Similarly, fashion retailer Quiz announced that it will place 82 of its stores into administration, impacting 822 jobs.
The high street retailer said it was looking to buy back stock and some of its assets from administration after negotiating better terms on rent with it landlords.