Business

Wagamama safe as The Restaurant Group restructures business

Company in talks with landlords as it looks to close up to 120 eateries

TRG’s leisure restaurant business primarily consists of Frankie & Benny’s, but also covers its Coast to Coast and Garfunkel’s chains. Photograph: Andrew Matthews/PA Wire

Wed Jun 10 2020 - 16:03

Wagamama will not be affected by moves by its parent group to shed up to 120 of its sites.

The Restaurant Group (TRG) has confirmed it is in talks with its landlords over restructuring plans. It is understood that the casual dining business is set to close 100-120 restaurants permanently, in a move which will affect 2,000-3,000 employees.

The company, which had not commented on the closure reports, told investors on Monday that it was “in discussions with our landlords regarding potential restructuring options for our leisure estate”.

TRG's leisure restaurant business primarily consists of Frankie & Benny's, but also covers its Coast to Coast and Garfunkel's chains.

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It said its Wagamama business, airport concession and pub operations would not be affected by these discussions.

The update came shortly after industry newsletter Propel reported that it was in talks with its landlords and was weighing up a company voluntary arrangement restructuring deal.

‘Exceptional challenges’

TRG stressed the restaurant sector was “facing exceptional challenges” due to the lockdown, and was “already facing significant challenges prior to the onset of Covid-19”.

In March, TRG shut 60 of its Chiquito Mexican-style outlets, as well as its Food & Fuel chain of pubs, after placing the two sub-brands into administration.

The company, which has about 22,000 staff on furlough, is one of the largest restaurant operators in Britain.

Analysts at Citi said the company would benefit from disposing of its whole leisure business, saying it comprises nearly half of the group’s sites but is likely to account for only 20 per cent of the company’s profits in the 2021 financial year.

The brokerage said: “A clean exit would leave the group focused on its growth businesses, which we think have stronger prospects and would command a higher multiple.”

Shares in the company moved 5 per cent higher in 77.7p in early trading. – PA

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