Tough period for casual dining chains takes toll on Frankie & Benny’s and Chiquito sites
PUBLISHED: 09:55 26 February 2020 | UPDATED: 10:03 26 February 2020
Picture: LUCY TAYLOR/ARCHANT
A dining chain plans to close up to 90 of its outlets by the end of next year, amid tough times for casual dining businesses.
Frankie & Benny's owner The Restaurant Group (TRG) - which also owns the Chiquito and the more profitable Wagamama brands and has sites across Suffolk and Essex - said at least 31 of its leisure sites will not see their contract renewed, with the number potentially rising depending on talks with landlords. It has already exited 18 sites in 2019.
Frankie & Benny's operates across Suffolk - at Cardinal Park and Nacton Road, Ipswich, and at Haverhill and Parkway, Bury St Edmunds. Chiquito has branches at Nacton Road, Ipswich and Tollgate West, Colchester, while Wagamama is in The Arc at Bury St Edmunds, Ipswich's Buttermarket and Colchester High Street.
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A spokesman was unable to give details of which of its sites might be affected, but did set out the broad plan for the business.
"As we continue to adapt to a fiercely competitive casual dining sector, we will selectively be closing between 75 and 90 sites in our Leisure portfolio, which primarily consists of the Frankie & Benny's and Chiquito brands, over the next two years.
"A number of these sites will be converted into Wagamama restaurants and we will be updating on the plans for specific locations as soon as we can."
TRG said it expects to dispose of up to 35 further sites, sell another 12 freehold sites, and plans to convert up to 12 current leisure restaurants into its more profitable Wagamama brand.
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Earlier this month, Frankie & Benny's and Chiquito premises at Ravenswood, Nacton Road, opened six years ago were put on the market - with a spokesman saying they were currently just "exploring options" as the casual dining market was facing "various headwinds".
The move will take the business's leisure portfolio down from 350 outlets to 260 to 275 sites by the end of 2021.
TRG reported like-for-like sales growth of 2.7% for the year to December, with group sales soaring 56.4% to £1.07bn, buoyed by its £559m acquisition of Wagamama in October 2018.
Wagamama continues to drive growth in the business, it said, with the pan-Asian chain reporting an 8.5% rise in like-for-like sales over the period.
But the group, which has 650 sites in total, slipped to a pre-tax loss of £37.3m for the year, following a £13.9m loss in 2018, after it was weighed down by its unprofitable leisure restaurants.
Chief executive Andy Hornby said its three growth businesses of Wagamama, concessions and pubs were all out-performing their respective markets and had "clear potential" for further growth.
But he was "acutely aware" of challenges facing the leisure business and wider casual dining sector.
"Following an extensive review we have defined three clear strategic priorities for the next two years: Grow our Wagamama, concessions and pubs businesses; rationalise our leisure business; and accelerate our de-leveraging profile."