The Restaurant Group likely to close 125 sites following CVA approval

The Restaurant Group will close 125 sites after 82% of its creditors voted in favour of a company voluntary arrangement (CVA).

The group, which owns Frankie & Benny's, Garfunkels, Chiquito, Coast to Coast and Wagamama, will be left with 160 sites in its 'leisure' portfolio, and see improved rent and lease terms on 85, exiting leases on 25 previously closed sites. 

More than 82% of creditors voted in favour of the CVA, which will impact TRG's ‘leisure' estate - mainly affecting the company's 226 Frankie & Benny's sites, as well as its Chiquito, Coast to Coast and Garfunkel's brands.

The CVA will see no change to Wagamama sites, airport concessions or pub operations, as these don't fall under the 'leisure' category.

In a statement, chief executive Andy Hornby said: "These are exceptionally challenging times for our sector and TRG is extremely grateful for the support shown by our creditors in today's vote.

"The approval of the CVA is a critical component in ensuring the future prospects for our ‘leisure' business. I would like to wholeheartedly thank our colleagues who have shown extraordinary commitment throughout the process."

Earlier this month, the company sent an email to managers in the group's Leisure Division, which includes more than 200 Frankie & Benny's outlets, seen by the BBC on June 2.

It said: "Many sites are no longer viable to trade and will remain closed permanently.

"The Covid-19 crisis has significantly impacted our ability to trade profitably, so we've taken the tough decision to close these restaurants now."

The Restaurant Group said in March that 61 out of 80 branches of its Tex-Mex dining chain Chiquito's would remain closed permanently as it fell into administration. It blamed the Covid-19 outbreak as having had 'an immediate and significant impact on trading'.

However, the group had already announced in February, prior to the introduction of lockdown measures, that it would speed up existing plans to close restaurants. Initially it had planned to make 150 closures - which were first signalled in 2019 - over a six-year period. It then said it would close 90 restaurants by the end of 2021.