Third of Wahaca restaurants to shut after business rates jump
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.