TRG, which owns brands including Brunning & Price, Coast to Coast, Frankie & Benny’s, Chiquito, and Wagamama, said a comprehensive review of the company’s leisure estate portfolio has identified around 210 trading sites that are either underperforming, on unfavourable lease terms, not expected to generate future profitable returns or subject to a combination of all three factors.
Of these, approximately 125 sites have been highlighted for closure in the short term under the CVA proposal, with 85 sites being subject to a reduction in rental costs and revised lease terms.
The CVA will be proposed by TRG UK – a subsidiary of TRG - but will not impact the ordinary course operations for the rest of the group, such as its pub operations, with the company continuing to trade as a going concern.
Decisive action
TRG chief executive Andy Hornby said: “The issues facing our sector are well-documented and we have already taken decisive action to improve our liquidity, reduce our cost base and downsize our operations.
“The proposed CVA will deliver an appropriately-sized estate for our leisure business to ensure we are well positioned, despite the very challenging market conditions facing the casual dining sector.
“I would like to wholeheartedly thank all my TRG colleagues for their continued understanding and extraordinary commitment during this unprecedented period.”
Investor impact
British Property Federation boss Melanie Leech said these situations were never easy, particularly now for the high street retail and hospitality businesses.
She added: “Property owners however, need to take into consideration the impact on their investors, including the millions of people whose savings and pensions are invested in commercial property, as they vote on any CVA proposal.
“TRG and consulting firm Alix Partners engaged with the British Property Federation before launching this CVA proposal.
“This has provided us an opportunity to improve understanding of property owners’ interests and concerns, but ultimately it will be for individual property owners to decide how they will vote on the CVA.”