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UK's Restaurant Group to sell or close 33 outlets
[LONDON] Britain's Restaurant Group will sell or close 33 outlets, it announced on Friday, sending shares in the operator of Frankie and Benny's and other brands up more than seven percent.
The company is making changes after issuing two profit warnings and removing its CEO and CFO this year. "We scored a lot of own goals over last three years,"Chairman Debbie Hewitt said on a call with journalists. "We can fix those." It will sell or close 33 underperforming stores and make other changes, including repricing and adding back some popular dishes to the menus at its Frankie & Benny's outlets.
Restaurant Group's other brands include Costa, Eat, Garfunkel's, Chiquito, Coast to Coast, Brunning & Price and Joe's Kitchen.
It said the 33 underperforming sites comprised 14 Frankie and Benny's outlets, 11 Chiquito restaurants and eight at its other brands The company, which operates more than 500 restaurants in Britain, has faced increased competition from pubs and restaurant chains and lowering footfall in retail parks where most of its restaurants are located.
Ms Hewitt said the second phase of Restaurant Group's strategic review would focus on its pub business, TRG Concessions.
Operating profit fell 4.4 per cent to £37.5 million(S$67.05 million) on revenue up 3.4 per cent to £358.7 million for the 27 weeks to July 3.
The group said it would take an exceptional charge of £59.1 million for the period from the prospective site closures and 29 site asset value impairments.
Shares in Restaurant Group, which maintained its full-year profit forecast, hit a high of 437 pence and were trading at 422p, up 3.7 per cent, at 1207 GMT.
Ms Hewitt said consumer demand had not been hit by Britain's decision to leave the European Union and that she did not expect that to change.
British retailers reported their strongest sales in six months in August, industry figures showed on Thursday.