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Sun 7th Jun 2020 - Exclusive: The Restaurant Group considers CVA option for leisure division
Exclusive – The Restaurant Group considers CVA option for leisure division: The Restaurant Group (TRG), the owner of Wagamama and Brunning & Price, has begun negotiations with landlords regarding the future of its circa 290-strong leisure division, with a company voluntary arrangement (CVA) believed to be one of a number of options being looked at, Propel has learned. It is thought these discussions will include negotiations on rents and the possibility of shifting to a turnover-based rent model; and site exits. The company is believed to be having discussions on a landlord by landlord basis. Wagamama, TRG’s airport concessions business and Brunning & Price are not affected by the discussions. Last week, it was revealed TRG was not planning to reopen between 100 and 120 of its leisure division sites. The vast majority operate under its circa 240-strong Frankie & Benny’s brand, but also takes in sites under the Coast to Coast, Garfunkel’s, Firejacks and Joe’s Kitchen concepts. In March, TRG said 61 out of 80 branches under its Chiquito's brand would remain closed permanently as it fell into administration. It cited the covid-19 outbreak as having had “an immediate and significant impact on trading”. Propel understands the company is in talks to buy back up to 20 of those sites out of administration. The company announced in February it would accelerate existing plans to close its leisure division restaurants. Initially it had planned to make 150 closures, which were first signalled last year, over a six-year period. It then said it would close 90 restaurants by the end of 2021. The current negotiations are an acceleration of that process. On current government guidance, TRG hopes to reopen a significant number of Wagamama sites and Brunning & Price pubs from July onwards. On Friday (5 June), Wagamama announced it was expanding its delivery operation to 100 restaurants nationwide and launching a click-and collect service. The brand reopened a handful of delivery kitchens at the end of April following trials of new working practices, then expanded this to 67 locations last week while introducing click-and-collect at a handful of branches. That service is now being rolled out across the whole open network, along with more reopenings. A further 18 sites are reopening on Thursday (11 June), with another 15 following by the end of next month. TRG's peers Prezzo, Casual Dining Group, PizzaExpress and Azzurri Group have all hired restructuring experts over the past two months, with all thought to be considering options including a CVA, as the sector battles against the impact of covid-19.


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