The Wagamama group is closing 90 restaurants
Following the capitulation of Jamie's Italian, owners of Frankie and Benny's, Chiquito, Brunning & Price and Garfunkel’s plan to close 90 sites.
It's not a good time for casual dining sector. Just ask The Restaurant Group (TRG), which has a portfolio of 350 restaurants, and owns many of the chains that populate towns and cities across the country, including Frankie and Benny's, Chiquito, Brunning & Price, Garfunkel’s and Wagamamas.
Last week the casual dining behemoth announced that it was planning to close 90 of its restaurants by the end of 2021. The contracts will not be renewed for at least 31 sites within TRG's portfolio, and the group stated that this number might rise based on further discussions with landlords. It also plans to do away with 35 other sites, sell 12 of its freeholds and convert 12 of its lower-performing restaurants into more profitable Wagamama branches.
The acquisition of Wagamama in 2018 caused a dramatic boost in profits: sales rose by a remarkable 56.4% in the following months. However, even the popularity of Wagamama's couldn't offset the sinkhole that was their other, less successful branches. Last year the company took a £37.3m pre-tax loss for the year, compared to a £13.9m loss in 2018.
Speaking to the Press Association, Andy Hornby, chief executive officer of The Restaurant Group focussed on the bright side:
“Our three growth businesses of Wagamama, concessions and pubs are all out-performing their respective markets and have clear potential for further growth. I am also acutely aware of the challenges facing our leisure business and the wider casual dining sector.
“Following an extensive review we have defined three clear strategic priorities for the next two years: Grow our Wagamama, concessions and pubs businesses; rationalise our leisure business; and accelerate our deleveraging profile.”
As Eddie Redmayne once sung: empty chairs at empty tables.
This dramatic downscaling comes months after Jamie Oliver's restaurant empire entered administration, and is concurrent with similar damage limitation moves by other large restaurant chains like Carluccio's, Byron and Strada.