TRG's CVA approved

By James McAllister

- Last updated on GMT

The Restaurant Group 125 restaurant closures CVA approved Frankie and Benny's Coronavirus casual dining

Related tags: The restaurant group, CVA

The Restaurant Group (TRG) is poised to close 125 sites within its struggling leisure arm following the approval of a company voluntary arrangement (CVA).

At a meeting held today (29 June), more than 82% of all creditors voted in favour of the proposal; while 65% of the unconnected creditors voted in favour of the proposal.

In accordance with the relevant statutory provisions, there is a 28-day period, following the filing of the report by the chair of the meeting, in which a creditor may apply to court to challenge the CVA.

As was reported earlier this month, TRG is aiming to reduce its estate by 125 sites​ under the CVA.

The decision came after 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 were 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 were identified for closure in the short term under the CVA, with the balance being subject to a reduction in rental costs and revised lease terms.

The group added at the time that the CVA will also include a mechanism to exit approximately 25 previously closed leisure sites.

“These are exceptionally challenging times for our sector and TRG is extremely grateful for the support shown by our creditors in today's vote," says chief executive Andy Hornby. 

"The approval of the CVA is a critical component in ensuring the future prospects for our Leisure business.  I would like to wholeheartedly thank our colleagues who have shown extraordinary commitment throughout the process.”

TRG says the closures will leave approximately 160 sites remaining within its leisure portfolio. 

Rumours of potential mass closures in the TRG leisure estate have been circulating since the beginning of the month, 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.

TRG, which is one of the UK's largest restaurant operators, has previously said that its Wagamama, airport concessions and pub operation divisions would not be affected by the CVA.

Prior to the pandemic, the group'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.

It 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.

Related topics: Business

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