Appetite wanes

TRG warns that 10% of its restaurants won’t reopen this year

THE Restaurant Group, behind the Frankie & Benny’s and Wagamama chains, today warned that one in 10 of its sites are not expected to reopen from lockdown this year.

The company, one of the UK’s numerous casual dining chains to be hammered by the coronavirus crisis, said that 10% of its estate will not reopen in 2020. The restaurants are in locations “where footfall is anticipated to remain considerably weak (primarily in some airport locations)”.

It revealed its reopening strategy alongside updating on new funding from the Government’s coronavirus aid scheme to give it extra headroom to ride out the crisis.

The company has accessed £50 million from the Coronavirus Large Business Interruption Loan Scheme, supported by Lloyds Banking Group.

TRG is lead by former HBOS chief Andy Hornby, who worked as a consultant for Lloyds after its 2008 takeover of the troubled lender.

TRG has agreed with lenders to extend loan terms and secured a covenant waiver. It now has debts of around £470 million.

Like rivals, TRG had to shut sites in March for the Covid-19 lockdown. Last month creditors approved a Company Voluntary Arrangement for its leisure division, which comprises the Frankie & Benny’s and Garfunkel’s brands.

That restructure allows TRG to close 125 branches, putting 3000 jobs at risk, and get lower rents on some other sites.

Taking into account the restructure, the company is left with 400 venues. It today said it has started a phased reopening of its restaurants and pubs.

A quarter of the estate will reopen by the end of July, and 90% will be serving customers again by late September. The Government this week announced an “eat out to help out” discount offering 50% off, up to £10 per head, on meals out on Monday to Wednesday during August.

Goodbody analyst Paul Ruddy said: “The reopening of the estate is slower than we had anticipated, but we would prefer to see the group focus on cost control and cash burn than re-opening for revenue.”

The shares fell 3.45p to 50.05p today.