Wahaca to close 10 sites as it considers CVA
The Mexican-themed restaurant chain is to close 10 of its 28 restaurants, including sites in London, Bristol, Manchester and Liverpool.
In an email to staff sent out this morning (26 August), founders Mark Selby and Thomasina Miers said that 'wherever possible' they are going to 'try and save jobs'.
Over the past four months the group says it has seen a 'significant' depletion of cash reserves as a result of the enforced closure of hospitality businesses caused by the Coronavirus pandemic, and subsequently has had to raise new equity to allow it to push ahead with reopenings.
However, the business had already seen rents, as a percentage of sales, at its city centre locations increase 'dramatically', which coupled with the uncertainty of the post-lockdown trading environment has now made a number of its sites untenable.
As a result the group will only be reopening restaurants that, even with the likelihood of significantly reduced sales, will not lose money, in order 'to avoid putting the entire business and every job at risk'.
The business will be working with landlords to manage the impact of this decision, and is exploring various options to facilitate its plan, including considering a CVA.
With the principles of new finance now agreed, the group says it will now 'positively focus itself on the future by continuing with its reopening programme and an ongoing dedication to its core offering'; aim to strengthen the position of its remaining sites; and return to growth as the market recovers.
"These have been the hardest decisions of our lives and we have looked at this from every angle with the sole objective of looking after as many of our teams and restaurants as we can without having to close the business for good like so many others have had to do," says Selby and Miers.
"[We] apologise unreservedly to those affected and once again thank you for everything you have done for us.
"[We] do believe we will go on to achieve amazing things but today we pause and say thank you to all the amazing people leaving us."
