The owner of restaurant chain Frankie & Benny’s has said it plans to close up to 90 restaurants by the end of next year.
The decision by The Restaurant Group, which also owns Mexican chain Chiquito, comes after it closed 18 stores across the two brands in 2019.
The closure plan comes amid a tough period for casual dining chains, with rivals such as Jamie’s Italian collapsing over the past year and Pizza Express struggling.
The owner of restaurant chain Frankie & Benny’s has said it plans to close up to 90 restaurants by the end of next year
The decision by The Restaurant Group, which also owns Mexican chain Chiquito, comes after it closed 18 stores across the two brands in 2019
TRG said at least 31 of its leisure sites will not see their contract renewed, with the number potentially rising depending on discussions with landlords.
It added that it also expects to dispose of up to 35 further sites and sell another 12 freehold sites.
It also plans to convert up to 12 current leisure restaurants into its more profitable Wagamama Japanese brand.
The move will take its leisure portfolio down to between 260 and 275 sites by the end of 2021, from 350.
Chief executive of The Restaurant Group Andy Hornby said he was ‘acutely aware’ of the challenges facing the firm’s leisure chains
TRG confirmed the closure plans as it reported like-for-like sales growth of 2.7 per cent for the year to December.
The group saw total sales soar 56.4 per cent to £1.07 billion as it was buoyed by its £559 million purchase of Wagamama in October 2018.
It said Wagamama continues to drive growth in the business, with the pan-Asian chain reporting an 8.5 per cent increase in like-for-like sales over the period.
The group, which has 650 sites in total, slipped to a pre-tax loss of £37.3 million for the year, from a £13.9 million loss in 2018, as it was weighed down by its unprofitable leisure restaurants.
Andy Hornby, chief executive officer of TRG, said: ‘Our three growth businesses of Wagamama, concessions and pubs are all out-performing their respective markets and have clear potential for further growth.
‘I am also acutely aware of the challenges facing our leisure business and the wider casual dining sector.
‘Following an extensive review we have defined three clear strategic priorities for the next two years: Grow our Wagamama, concessions and pubs businesses; rationalise our leisure business; and accelerate our deleveraging profile.’
The move by the firm follows the closures of several high street chains last year, the most prominent being chef Jamie Oliver’s brand Jamie’s Italian, which collapsed in May.
The chain had run up £71.5million in debt and moves by administrators saw 22 of its 25 sites closed, with the loss of around 1,000 jobs.
The 44-year-old, who has netted £240 million during 20 years in the public eye, said he was ‘devastated’ and ‘deeply saddened by the outcome’.
Oliver said at the time of the collapse: ‘I appreciate how difficult this is for everyone affected. It’s been a real pleasure serving you.’
Last month, it emerged that much of the £80million-plus owed by the collapsed chain will probably never be paid back to creditors.
Which restaurants are closing amid the high street bloodbath?
The move to close Frankie & Benny’s and Chiquito’s outlets comes amid a bloodbath which is sweeping Britain’s high street.
The most prominent collapse in 2019 was of TV chef Jamie Oliver’s chain Jamie’s Italian in May, which had run up £71.5million in debt.
Its closure led to the loss of more than 1,000 jobs, prompting the chef to say he was ‘devastated’ and ‘deeply saddened by the outcome’.
The move to close Frankie & Benny’s and Chiquito’s outlets comes amid a bloodbath which is sweeping Britain’s high street. Pictured: Jamie’s Italian collapsed in May last year
And in March last year,chains Giraffe and Ed’s Easy Diner revealed that their owner plans to close a third of the brand’s sites.
Boparan Restaurant Group (BRG) announced that a total of 27 out of its 87 restaurants would close.
It bought Giraffe from Tesco in 2016 and combined it with Ed’s Easy Diner after acquiring the chain that same year.
Underlying losses of £1.6million that hit the combined entity were revealed in its most recently available annual accounts.
Giraffe (pictured) is among the casualties of the bloodbath sweeping the British high street
Last year, several casual dining brands closed sites amid rising costs and tougher competition.
Prezzo, Byron, Carluccio’s, Gaucho and Gourmet Burger Kitchen all shut branches.
In November, creditors of Gourmet Burger Kitchen approved a plan to close 17 of the premium burger chain’s restaurants, putting around 250 jobs at risk.
South Africa’s Famous Brands, which acquired GBK in 2016 for £120 million, has previously unveiled stinging losses at the burger chain.
The firm said in October that it would take a pre-tax impairment charge of 874 million rand (£47.2 million) due to the brand’s sustained under-performance. Also in 2018, Prezzo announced that 94 of its 300 outlets will close.
KPMG found the number of restaurants experiencing significant financial distress was 11,091 in March 2018, up 8 per cent on a year earlier.
Administrator KPMG has revealed that the majority of the £83million owed to secured and unsecured creditors such as food suppliers, councils and landlords will not be recovered.
Auditors said that while three Jamie’s Italian restaurants and delis at Gatwick Airport remain open, the people owed money for the past eight months are likely to be significantly out of pocket
And popular chain Pizza Express, which was founded in 1969, was faced with the threat of closure last year due to its debts of around £655million.
The restaurant is thought to have struggled with rising costs and a tough UK trading environment, putting 14,000 jobs at risk.
The brand has around 600 restaurants across the UK and Ireland, and if these close, hundreds of thousands of workers could be out of a job.
Other chains to have been affected by the tough dining market include Prezzo, Byron, Carluccio’s, Gaucho and Gourmet Burger Kitchen, all of which shut branches.
Bloodbath on the High Street: How shops in the UK went from bustling to bust
Mothercare, Debenhams and L.K. Bennett all fell into administration in 2019, with thousands of jobs cut or put at risk.
It was the second year in a row that the High Street was ravaged, after 2018 saw one of the worst years for UK retailers.
Baby retailer Mothercare cut 2,500 jobs after its administration announcement closed 79 stores nationwide.
It follows the likes of Bonmarche, Jack Wills and Karen Millen, which have all gone bust in recent months.
Mothercare has announced plans to put its UK retail business into administration
Crisis hit brands such as House of Fraser and Marks & Spencer have been fighting to keep stores open while other retailers such as New Look pushed for a solution to stop store closures and job losses.
In 2018 nearly 85,000 retail jobs were lost in the UK as businesses continued to go bust as 1,000 retail business went into administration between January and September.
As well as this the number of retail outlets left empty was up by 4,400 in 2018 according to data from the Local Data Company.
House of Fraser (pictured above) is one of the crisis hit brands on the UK High Street
Marks & Spencer has been battling with the UK High Street and had previously struck a deal with Ocado to transform grocery shopping
Last year New Look announced it would be closing 85 stores across the UK
High Street giant Gap has also announced it will close 230 stores worldwide as its US parent company launches a massive restructuring programme.
The pressure on High Street retailers has hit an all-time high as they continue to try and keep up with the ever growing popularity of online shopping.
Online retailers are able to keep prices low as they don’t face the massive rental costs of physical stores or the staff rates.
While retailers battle the rise in online shopping they are also being forced to battle Brexit, as many supply chain routes and whether or not they will be available in a no-deal scenario have put added cost worries onto retailers as many consider stock piling their items or not importing them at all.
GAP (pictured above) also announced it was closing more than 200 stores as part of a worldwide restructuring programme
The rise in online shopping with companies such as Amazon has also put a strain on the High Street
Here are some of the big name retailers which have lost out as they face fierce competition from the rise of online shopping
The carpet retailer is closing 92 stores across the UK. These closures represent nearly a quarter of all UK Carpetright stores.
Toys R’ Us
The UK’s largest toy shop went into administration in February 2018, leading to an estimated 2,000 redundancies.
House of Fraser
The department store chain was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley.
The electronics giant has gone bust, closing shops across the country and putting thousands of jobs at risk.
The retailer has announced plans to put its UK retail business, which has 79 stores, into administration – putting around 2,500 jobs at risk. It had already closed 55 stores since last year.
Poundworld announced it was going into administration on June 11 after talks with potential buyer R Capital broke down, putting 5,100 jobs at risk.
The DIY chain set to close 42 DIY outlets shut, putting around 1,500 jobs at risk.
Marks & Spencer
The retailer announced in May it plans to close 100 stores by 2022, putting hundreds of jobs at risk.
In August stores in Northampton, Falkirk, Kettering, Newmarket, New Mersey Speke, Stockton and Walsall all ceased trading.
Orla Kiely, the Irish fashion retailer collapsed in September and closed all its stores after a slump in profits.
In December HMV entered into administration with its flagship London Oxford Street having closed earlier this year.
Fashion brand L.Bennett announced it was filing for administration on March 1, 2019. Linda Bennett sent employees an email early in the morning to inform them of the news before it hit news outlets.
In March, Liam Gallagher’s Pretty Green filed a notice of intention to appoint Moorfields Advisory to handle insolvency problems across its UK stores. At the beginning of April 2019 JD Sports purchased the company, saving around 70 jobs.
Debenhams fell into administration in April with debts of £640million following three profits warnings last year.
The firm has 166 stores and employs 25,000 people but has announced plans for around 50 stores to close in the next two years, with 22 shutting by 2020, affecting 1,200 jobs.