Wagamama and Frankie and Benny's owner to close 35 restaurants in bid to boost earnings
8 March 2023, 18:56
Wagamama and Frankie & Benny's owner has revealed plans to shut around 35 of its loss-making dining locations in efforts to boost earnings.
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The Restaurant Group (TRG) warned of job losses following the announcement, saying the closures would help it shore up cash after reporting widening losses over 2022.
It is reducing its estate by around 30 per cent, with plans in place to convert three restaurants to Wagamama.
The rest are expected to be sold or the lease will be ended or left to expire.
It comes after TRG revealed its pre-tax losses widened last year, from £35.2 million in 2021 to £86.8 million in 2022, as it faced a knock-back from cost inflation across food and drink, energy and wages.
Read more: Two more Wetherspoons close as 34 remain at risk of shutting down - is your local on the list?
Andy Hornby, TRG's chief executive, said the move forms part of a "robust plan" to improve the group's margins over the next three years.
"Every year a number of leases come up for potential renewal, so the vast majority is where we are going to selectively - and we haven't fully decided yet, we are going to constantly review the way the sites are trading - exit a number of those, rather than renew the lease for another five or 10 years," he said.
"We will manage that on a localised basis, and the teams will be the first people to know.
"But we are not closing any sites that we think have got long-term profitable futures."
He added: "A significant number of these potential sites are in areas where we have other brands, so the job impact should be significantly less than you might think from the number of sites that we will not be renewing."
TRG has faced pressure from activist shareholders to improve returns, with shares in the business shrinking to less than a third of pre-pandemic levels.
The company, which has around 18,000 staff, has already cut several restaurants, including closing the majority of its Chiquito restaurants at the start of the pandemic to bolster its finances.
Meanwhile, sales from people dining in at Wagamama increased by nearly a 10th last year, offsetting a 17% decline in takeaway sales as people returned to the high streets.
TRG said it wants to open five to six new Wagamama restaurants a year for the next three years, and increase the number of restaurants from 156 today to around 200 in the long term.
