The Restaurant Group to shut 35 restaurants as losses widen
The group, which owns Wagamama and Frankie & Benny’s, said it would be cutting its loss-making restaurants in efforts to boost profits.
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Your support makes all the difference.The Restaurant Group (TRG) has revealed it will be shutting around 35 of its loss-making casual dining restaurants, which could include chains Frankie & Benny’s and Chiquito, in efforts to boost its earnings.
The group, which owns Wagamama, reported widening losses last year and said some of its restaurant chains had been directly impacted by cost-of-living pressures dampening consumer demand.
It is set to reduce its leisure estate by about 30%, converting up to three of the restaurants to Wagamama while the rest will be sold or the lease will be ended or left to expire.
The move is set to shore up more cash for the group, which has been under pressure from activist shareholders to shake up its strategy to boost profits and shareholder returns.
The calls have been led by activist investor Oasis Management, which has built a 6.5% stake in the restaurant business.
It comes after shares in the business have dropped to less than a third of pre-pandemic levels.
And its statutory pre-tax loss widened to £86.8 million in 2022 from £35.2 million the previous year, TRG said on Wednesday.
Nevertheless, TRG said its sales jumped to £883 million last year, from £636 million the previous year, and reported an “encouraging” start to the year across all its divisions.
Andy Hornby, chief executive of The Restaurant Group, said: “We’ve delivered a strong operating performance for the year in a market which has continued to pose a number of headwinds for casual dining operators.
“Current trading has been very encouraging to the great credit of our teams who continue to ensure our customers receive the best experience possible.
“We have a clear plan to increase EBITDA margins over the next three years and deliver significant value for all our stakeholders.”