The Restaurant Group shuts 125 outlets, seeks cheaper rents

The Restaurant Group said it would close 125 eateries and seek cheaper rents for the remainder of its Frankie & Benny's chain and other outlets in leisure locations.

The owner of Wagamama has put 210 of its restaurants into a company voluntary arrangement (CVA) which allows businesses to renegotiate terms with landlords.

The closures will mainly affect the Frankie & Benny's chain and will put up to 3,000 jobs at risk at outlets near cinemas and at shopping centres. The company, which also owns the Garfunkels chain, owns about 600 restaurants and has about 22,000 workers furloughed during the Covid-19 crisis.

The company said the scrapped restaurants were either underperforming, on unviable leases, unprofitable or suffering a combination of these problems. The cuts will not affect Wagamama, airport sites or the company's pubs.

The Restaurant Group's announcement adds details to reports last week that it was planning to close up to 125 Frankie & Benny's branches. The closures are on top of plans unveiled in March to shut 61 of its 80 Chiquito's branches. The company raised £57m from investors in April to help it weather the crisis, which shut all restaurants from late March.

Chief Executive Andy Hornby, famed for leading the HBOS bank to its doom in the financial crisis, is speeding up plans to cut tired formats to concentrate on Wagamana, which the company bought in late 2018. The Restaurant Group was already struggling to stand out amid a glut of casual dining chains before he took over and the Covid-19 emergency put the future of many restaurants in doubt.

Hornby 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. 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."

A CVA allows companies to renegotiate with other creditors as well as landlords but The Restaurant Group said it would only seek better terms from its landlords. The company's shares, which have more than halved in 2020, rose 2.7% to 72.46p at 08:30 BST.