United Kingdom

Frankie & Benny's permanently shutting sites, report says

The company behind Frankie & Benny's and Wagamama restaurants is gearing up to tell staff that a large number of its sites will not reopen after lockdown, it has been reported.

In an email sent to staff, The Restaurant Group will tell its workforce that many sites are 'no longer viable to trade and will remain closed permanently', according to the BBC.

While it remains unclear exactly which or how many restaurants and staff will be affected, the email is being sent to mangers in the company's Leisure Division, which comprises over 200 Frankie & Benny's restaurants.

At risk? A number of sites in The Restaurant Group's portfolio may not reopen

The email being sent to managers reportedly says: 'The Covid-19 crisis has significantly impacted our ability to trade profitably, so we've taken the tough decision to close these restaurants now.'

Staff working in affected restaurants now due to stay permanently closed are look set to be told: 'Unfortunately, unless there are any suitable alternative roles identified, it's likely your role will be made redundant.'

Imminent Frankie & Benny's closures were already announced by The Restaurant Group back in February, with the group saying it planned to shut up to 90 restaurant sites by the end of next year. 

This is Money has contacted The Restaurant Group for comment. 

The Restaurant Group, which has around 22,000 staff on furlough at the moment, was forced to shut the bulk of its Chiquito Mexican-style sites as well as its Food & Fuel chain of pubs in London this year after collapsing into the hands of administrators. 

While Frankie & Benny’s and Chiquito sales fell 2.8 per cent last year, other brands in The Restaurant Group's portfolio, like Wagamama, have fared better.

Over the last year, the group saw total sales climb over 56 per cent to £1.07billion after being buoyed by its £559million acquisition of Wagamama in October 2018. 

In February, The Restaurant Group's boss Andy Hornby said: 'Our three growth businesses of Wagamama, concessions and pubs are all outperforming 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.'

Tough times: The Restaurant Group has already shut the bulk of its Chiquito restaurants

Stronger sales: The company's Wagamama sites are faring better in terms of sales

Closures: Jamie Oliver's 'Jamie's Italian' restaurant group collapsed last year 

The restaurant sector has been seriously hit during the pandemic, with outlets forced to closed up and down the country. 

The sector looks set to be among the last to given the green light by the Government to get back into gear again.

While many sites like shops are reopening on 15 June, restaurants and pubs, where the concept of social distancing goes against the very essence of the nature of the businesses involved, will have a tougher time implementing appropriate measures to ensure staff and consumers stay safe.

The Casual Dining Group, which owns Bella Italia and Cafe Rouge, said this week it had received interest from buyers who would snap up its entire portfolio of restaurants. 

The Bella Italia owner filed a notice of intention to appoint an administrator last month 'as a protective measure', in a move which could have put around 6,000 jobs at risk.

Even before the pandemic, the challenges faced by the casual dining sector were stark, with high-profile names like Jamie's Italian collapsing into the hands of administrators in May last year.

In its last set of accounts, Jamie's Italian reported a £31.1million loss before tax in 2017, citing 'a marked deterioration in UK consumer confidence” and “increased competition from new entrants.' 

Following a lengthy spell of financial trouble, Carluccio's has recently been bought out of administration by Boparan Restaurant Group, the owner of restaurant Giraffe and is now set to reopen in line with the current Government guidelines.  

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