Ocean Plaza could lose 2 restaurants

OCEAN Plaza faces the risk of losing two tenants after the Restaurant Group announced plans to close more than 100 branches.

The chain this week said it would close at least 124 Frankie & Benny’s and Chiquito outlets over the next six years after it tumbled to a £79m first half loss.

Income at the restaurants continued to fall last year, despite changes to the menus, while the company has also attempted to boost sales by offering food on takeaway services such as Deliveroo under different brand names.

No announcements have yet been made about which branches will close but about half of the group’s 352 original casual

dining sites, mainly Frankie & Benny’s and Chiquito as well as Garfunkel’s and Coast to Coast, are expected to be closed as their leases expire or they reach a contractual break period.

Some good news is that of the 124 restaurants, about 15 will be converted to the Wagamama brand, which the group bought in a £559m deal last year.

But they are likely to be in city locations rather than towns.

Group chairman Debbie Hewitt said it was taking a cautious approach to the struggling casual dining chains amid a “consumer environment that is tough with all sorts of uncertainty.”

She said: “We are mindful of the headwinds in the casual dining sector and the meaningful uncertainties created by the potential of a no deal Brexit and are planning with this in mind.”

Andy Hornby, the former HBOS executive who joined as chief executive of the Restaurant Group last month, said he supported the Wagamama acquisition and it was clear “the group is being transformed”.

He said: “Despite the well documented challenges facing the casual dining sector, the group’s diversified set of brands provides firm foundations.”

Sales at the group’s established sites rose 4% in the six months to June 30, driven by a 10.4% surge at Wagamama and a strong performance at its pubs and airport concessions. Total sales rose 58.2% to £515.9m and underlying pretax profit was up 36% to £28m.

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