The future of Frankie & Benny’s sites in Tayside and Fife is uncertain after the firm said it was looking at slashing its number of restaurants.
Frankie and Benny’s estate includes sites at the Overgate Shopping Centre in Dundee, St Catherine’s Leisure Park in Perth, Fife Central Retail Park in Kirkcaldy and Fife Leisure Park in Dunfermline.
Parent company The Restaurant Group yesterday said it was looking at exiting sites to stabilise its long-term future after posting hefty losses.
The group also owns Wagamama, Garfunkel’s and Chiquito, which has a restaurant in Dunfermline.
The company said it expects to close around half of its sites when leases come up for renewal. The estate has a median of six years to the first potential exit date.
The firm today would not confirm the length of time remaining on its leases in Tayside and Fife.
The Restaurant Group said: “Our leisure business has benefitted from our initiatives to improve food offering, service standards and brand proposition, as set out below.
“Nevertheless, the backdrop remains challenging and we continue to take a disciplined approach to our estate.
“In the first eight months of 2019, we have closed 16 sites (10 Frankie & Benny’s, four Chiquito, one Coast to Coast and one Garfunkel), reducing the overall leisure estate to 352 sites.
“We are making progress in negotiations with landlords when there are lease events, having obtained rent reductions in the most recent negotiations as well as greater flexibility in lease terms.
“The remaining estate has a median of six years to the first potential exit date (i.e. lease expiry or the date at which we can exercise a break clause).
“We expect to exit at least 50% of Leisure sites reaching their next exit date, and will continue to explore market opportunities to exit these sites earlier where possible.”
The Restaurant Group posted an £87.7 million pre-tax loss in the six months to June 30, falling from a £12.2m profit in the previous year, as it was weighed down by impairment charges related to its leisure estate.
Like-for-like sales for the period rose by 4%, the company said, as total sales surged on the back of its £559m acquisition of Wagamama in October 2018.
Wagamama drove the company to a 58% increase in total sales to £515.9m for the period.
Half-year sales for the leisure division “marginally declined” as it was dented by comparisons against a strong 2018 driven by weather and the men’s football World Cup.
Debbie Hewitt, non-executive chairman of The Restaurant Group, said: “We continue to focus on improving our brand offerings and delivering the best possible experience to our customers whilst optimising our leisure business to enhance the overall group performance.
“Prevailing feeling is that uncertainty is having an impact on consumer sentiment but we believe we have a sufficiently strong set of brands.
“Regarding Brexit, the supply of food and labour are the two issues we want clarity on and are working to ensure we are as prepared as possible.”
The half-year figures were the first results since the company appointed former HBOS chief Andy Hornsby as its new chief executive.
Mr Hornsby said: “I am delighted to have joined The Restaurant Group in August.
“Despite the well documented challenges facing the casual dining sector, the group’s diversified set of brands provides firm foundations.”
