Third of Wa­haca restau­rants to shut af­ter busi­ness rates jump

The Daily Telegraph - Business - - Business - By Han­nah Ut­t­ley and Ben Gart­side

WA­HACA, the Mex­i­can restau­rant chain set up by Mas­terchef win­ner Thomasina Miers, is set to shut more than a third of its sites in an at­tempt to shore up cash.

The group said 10 of its 28 restau­rants would per­ma­nently close as rental costs in city cen­tre lo­ca­tions made run­ning them “un­ten­able”.

Wa­haca said rents in some lo­ca­tions had risen by up to 70pc over the past five years, with busi­ness rates in­creas­ing by 30pc to 40pc.

In an email sent to staff yes­ter­day, Ms Miers and co-founder Mark Selby said the com­pany would try to save jobs where pos­si­ble, adding that the de­ci­sion had been “the hard­est of our lives”.

Wa­haca em­ploys about 1,000 peo­ple and did not con­firm whether re­dun­dan­cies had al­ready oc­curred.

Sites in Lon­don, Bris­tol, Manch­ester, Liver­pool, Chich­ester and Southamp­ton have been ear­marked for clo­sure af­ter the chain’s cash re­serves were drained while its restau­rants were closed in lock­down.

Wa­haca said it was also con­sid­er­ing a com­pany vol­un­tary ar­range­ment to fa­cil­i­tate the cost-sav­ing pro­gramme – a move that could en­able it to ne­go­ti­ate re­duced rents with land­lords and close fur­ther sites.

It comes as the hos­pi­tal­ity sec­tor braces it­self for life af­ter the Chan­cel­lor’s Eat Out To Help Out scheme that ends on Mon­day.

The Trea­sury-funded ini­tia­tive gives din­ers a 50pc dis­count on food and soft drinks, up to a max­i­mum of £10 per head, from Mon­day to Wed­nes­day dur­ing Au­gust. It has been praised by op­er­a­tors for giv­ing con­sumers the con­fi­dence to visit restau­rants again af­ter lock­down.

The Grosvenor Es­tate, one of Lon­don’s big­gest com­mer­cial land­lords, said it would sub­sidise the Chan­cel­lor’s dis­count scheme un­til the end of Sep­tem­ber for its restau­rant ten­ants in an ef­fort to boost pa­tron­age.

Grosvenor will repli­cate the Chan­cel­lor’s scheme through­out Sep­tem­ber but re­im­burse the cost of a half-price meal in the form of re­duced rent for its ten­ants.

Wa­haca is the lat­est hos­pi­tal­ity firm to fall vic­tim to the ef­fects of the coro­n­avirus cri­sis, with chains in­clud­ing By­ron Burger and Pizza Ex­press an­nounc­ing per­ma­nent clo­sures in the af­ter­math of lock­down.

Fash­ion chain New Look also re­vealed yes­ter­day it was hop­ing to slash costs by switch­ing its store leases to turnover-based rents in an ef­fort to weather the cri­sis and pro­tect over 11,200 jobs as part of a pro­posed CVA.

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