The Restaurant Group, the parent company of Frank & Benny’s and Chiquito, has announced that as many as 35 of its restaurants will close. This is part of a larger plan to reduce their estate by 30 percent by the end of next year, primarily affecting employees at the Frankie & Benny’s, Chiquito, and Food & Fuel brands.
The move comes after the company’s share price dropped by two-thirds last year and its pre-tax loss increased to £86.8 million in 2022 from £35.2 million in 2021, despite sales increasing to £888 million. Customers’ reduced spending and rising operating expenses were cited as the primary reasons for the closures. During the pandemic, worker shortages, calls for higher wages, and rising ingredient costs have also affected the casual dining industry.
Andy Hornby, the company’s chief executive, stated that the organisation had a “clear plan” to increase its margins over the next three years and “deliver substantial value to all our stakeholders.” However, the successful Wagamama restaurant chain will not be impacted by the closures.
Russ Mould, investment director at AJ Bell, stated that The Restaurant Group was under pressure from larger investors to sell off some of its brands. He suggested that selling the Frankie & Benny’s and Chiquito chains and rebranding the company as Wagamama could create a more streamlined and focused operation that would be more attractive to investors.
The Restaurant Group, one of the largest employers in the United Kingdom with 18,000 employees, is experiencing difficulty in the casual dining industry due to rising costs and consumer cost-of-living pressures. However, it has a plan to increase its margins and provide value to its stakeholders over the next three years. The company is considering selling some of its brands in order to create a more streamlined operation.
