Wagamama owner TRG to close 35 locations as cost of living crisis digs into profits
The Restaurant Group (TRG) will shrink its leisure portfolio by 30 per cent, as the group posts an annual loss of £86.8m for the year.
The Wagamama owner said that it will shutter some 35 “loss making” locations taking its portfolio from 166 restaurants down to 75-85 due to a “tough macro-environment,” which has deterred customers from eating out.
The listed restaurant group, which also owns Frankie & Benny’s, said that it will look to convert a handful of underperforming sites to Wagamama restaurants – its most popular eatery.
Andy Hornby, chief executive of TRG, told City A.M that the decision to close the underperforming sites was “pragmatic” and is part of a three year strategy to increase its EBITA operating margin.
Furthermore, the chief said it would do “everything it could” to redeploy staff which would be impacted by the closures.
As the cost of living crisis weighs heavy on consumers pockets, TRG also revealed a net-debt of £185.7m, up from £171.6m the prior year.
Despite this, the group reported total sales of £883.0m up from £636.6m in 2021.
It comes as TRG has been embroiled in a spat with one of its shareholders Oasis regarding the viability of the business.
Andy Hornby, chief executive officer, said: “We’ve delivered a strong operating performance for the year in a market which has continued to pose a number of headwinds for casual dining operators.
“Current trading has been very encouraging to the great credit of our teams who continue to ensure our customers receive the best experience possible,”
It comes as TRG has been enthralled in a spat with one of its shareholders Oasis regarding the viability of the business.
Last month, Oasis, which has a 6.5 per cent stake in TRG, argued that the chain needed an “immediate” change of governance because it had “one of the worst performing share prices of any UK leisure company”.
However, TRG hit back and said the group had proved to be “resilient” in the face of the pandemic.
Commenting on the disagreement, Hornby told City A.M that investors and the public should “judge TRG on its numbers”.