The Restaurant Group has announced plans to close 125 of its sites, as the company seeks to push down rents to weather the financial storm of the coronavirus crisis.
The closure, which puts around 3,000 jobs at risk, will mainly impact its Italian-American-themed Frankie & Benny’s chain. It marks a significant cut to the size of the Wagamama-owner’s estate.
Companies in the restaurant and wider hospitality sector have been forced to drastically downsize their operations in recent months as they look to survive the pandemic and subsequent lockdown.
The Restaurant Group will use a so-called company voluntary arrangement (CVA), an insolvency process that allows firms to renegotiate debts with creditors, to restructure its business.
Of 210 underperforming stores that the company has identified, 125 have been marked for closer.
Meanwhile, it will look to reduce rent costs at a further 85 outlets. The company will be left with 160 remaining restaurants.
Wagamama, the pan-Asian restaurant for which the company is perhaps most famous, will not be affected, having bucked a wider industry downturn since The Restaurant Group bought it for £559m in 2018.
The group was already firming up plans to close some sites before the pandemic hit, however the lockdown has severely deepened many problems it was already suffering.
Before the lockdown in March, the firm closed 60 of its Chiquito Mexican-style outlets, as well as its chain of pubs Food & Fuel.
“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,” chief executive Andy Hornby said.
“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.”