TRG eyes 125 closures as CVA announced
TRG says the decision follows a comprehensive review of the group's leisure portfolio, which includes the Frankie and Benny’s, Garfunkel's and Chiquito chains.
As a result, approximately 210 sites have been identified as either being underperforming; on unfavourable lease terms; not expected to generate future profitable returns going forward; or subject to a combination of the three.
Of those sites, 125 have been identified for closure in the short term under the CVA proposal, with the balance being subject to a reduction in rental costs and revised lease terms.
The group adds that the CVA will also include a mechanism to exit approximately 25 previously closed leisure sites.
Assuming the proposals are approved and successfully implemented, TRG says this will leave approximately 160 sites remaining within its leisure portfolio.
It adds that the proposals reflect the group's 'proactive approach to ensuring a long-term sustainable business for all stakeholders in the face of unprecedented disruption to the UK’s casual dining sector'.
“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," says TRG chief executive Andy Hornby.
"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.
"I would like to wholeheartedly thank all of my TRG colleagues for their continued understanding and extraordinary commitment during this unprecedented period.”
Rumours of potential mass closures in the TRG leisure estate have been circulating since last week, when an email sent to TRG staff and seen by the BBC said that many sites were no longer viable to trade, and would remain closed permanently post lockdown.
It is thought that between 2,000 and 3,000 employees could lose their jobs as a result of the closures.
The group, which is one of the UK's largest restaurant operators, added that its Wagamama, airport concessions and pub operation divisions would not be affected by the proposals.
The CVA will not seek to compromise claims of any creditors other than certain landlords, and inter-company liabilities. The rights and entitlement of all trade suppliers, HMRC and employees will not be affected by the proposals.
A vote on the proposal is scheduled for 29 June.
Prior to the pandemic TRG's leisure arm was already facing a notable struggle, having announced in February that it was to cut the size of its estate from 350 sites to 260-275 by the end of 2021.
The group has already closed 61 of its 80 Chiquito restaurants due to the pandemic, having placed the Tex-Mex chain in to administration in late March.
At the same time, TRG also appointed administrators for its 11-strong Food and Fuel gastropub group, with all sites closed permanently.
