Restaurant chains to go into administration or close sites in 2020 

Britain’s hospitality sector is fighting to recover from the impact of the Covid-19 pandemic and UK lockdown.

Chancellor Rishi Sunak is hoping to boost the industry with his new Eat Out to Help Out Scheme , but the future of the sector remains shrouded by uncertainty.

The initiative gives diners 50 per cent off at participating restaurants on Mondays, Tuesdays and Wednesdays during August, with discounts capped at £10.

It is costing the government £500million, but the Chancellor is hoping the move will revive businesses, many of which are struggling to stay afloat.

Restaurants, pubs, cafes and other eateries across the country are being forced to close sites and cut jobs after months of being shut under lockdown restrictions. And some will never recover.

But which chains have fallen into administration, closed branches or launched company voluntary agreements (CVAs) – an insolvency process – this year?

BusinessLive takes a look at the major chains that have had a difficult 2020.

Pizza Express

Pizza Express is reportedly preparing itself for debt talks
Pizza Express is preparing for a CVA (Image: Aldershot News and Mail)

Up to 1,100 jobs are at risk at restaurant chain Pizza Express after the firm announced proposals to close around 67 of its sites this week.

The company is planning to launch a company voluntary arrangement (CVA) in the “near future” amid moved to push down its rents.

The firm said the outcome has “yet to be decided” but it may end in the closure of around 15 per cent of its 449 restaurants in the UK, affecting 1,100 staff.

It is not yet known which restaurants have been earmarked for closure in the plans.

Byron Burger

(Image: PA)

Burger chain Byron is to permanently close 31 restaurants across the UK with the loss of 651 jobs, after the restaurant brand was bought up in a pre-pack administration deal.

Administrators at KPMG said that the brand and certain assets have been sold to newly-formed company Calveton, in a move which will protect its 20 remaining sites and 551 employees.

KPMG said the dining chain’s existing investors will also take a minority stake as part of the deal.

Byron, which was founded in 2007, undertook a major restructuring in 2018 to wipe out its debts and close underperforming restaurants.

Ask Italian and Zizzi’s owner Azzuri Group

Zizzi
Zizzi

The owner of Ask Italian and Zizzi pizza chains will not reopen around 75 of its restaurants following the coronavirus pandemic, resulting in the loss of up to 1,200 jobs.

The Azzuri Group is being taken over by investment firm TowerBrook Capital Partners, which plans to keep open 225 restaurants and shops, protecting 5,000 jobs.

But approximately 75 sites fall outside the scope of the deal and will subsequently close. It is unclear which restaurants will be affected.

Bistrot Pierre

More than 600 jobs were saved in July after restaurant chain Bistrot Pierre was bought in a pre-pack administration – but six sites across the UK will close.

A total of 19 Bistrot Pierre restaurants have been acquired by a new firm named after the year the business was founded, Bistrot Pierre 1994, reported to be backed by the brand’s chairman, John Derkach, and chief executive Nick White.

The deal saves 682 of Bistrot Pierre’s 803 employee and 674 of them are now returning from furlough.

The company will close sites at Bath, Cardiff, Harrogate, Leicester, Middlesbrough and Sheffield, leading to 123 redundancies.

Pret A Manger

Pret a Manger, Cherry Street, Birmingham
Pret a Manger, Cherry Street, Birmingham.

Around 1,000 jobs are understood to be at risk after upmarket sandwich and coffee chain Pret a Manger announced plans to close 30 sites.

The company said recent sales had plummeted by 74 per cent compared with the same period last year.

Pret said it will also reduce the number of staff working across its remaining UK stores to reflect the slump in demand.

The company said it has faced “significant operating losses” following the Covid-19 outbreak, despite having reopened over 300 of its sites.

Pret will soon start consultations with staff as it pushes forward with plans to shut these 30 sites in the second half of the year.

Cafe Rouge and Bella Italia’s owner Casual Dining Group

(Image: Surrey Advertiser)

Almost 2,000 jobs will be lost after the owner of Bella Italia, Cafe Rouge and Las Iguanas called in the administrators.

Casual Dining Group said it would close 91 of its 250 restaurants, but has saved others for now.

The move leaves around 4,050 workers at the company’s sites across the UK, with the company’s board saying that entering administration was in the best interest of stakeholders during the “extreme operating environment” it is having to trade through.

It is hoped that the firm can find a new owner, but it said that the administration would allow it to end negotiations with landlords, a “critical step” before finding a buyer.

Upper Crust and Ritazza’s owner SSP

(Image: PA)

Upper Crust and Ritazza’s owner SSP has announced plans to shed up to around 5,000 jobs as a result of plunging passengers numbers at transport hubs due to the coronavirus pandemic.

The group, which also owns a number of brands while running travel sites for other big names, warned it expects to open only around a fifth of its sites in the UK by the autumn as travel is set to remain at very low levels amid the Covid-19 crisis.

It has launched a consultation on a restructure to “simplify and reshape” the business in the face of the pandemic, which it said could lead to more than half of its 9,000-strong peak season workforce being axed.

The group said head office and UK staff would be affected by the cuts.

Frankie & Benny’s and Wagamama’s owner The Restaurant Group

Creed worked on Frankie and Benny’s in Highcross, Leicester

Around 3,000 jobs are at risk after The Restaurant Group launched a CVA which would close 125 of its sites around the UK.

The Frankie & Benny’s, Wagamama, Coast to Coast and Garfunkels owner said it was seeking approval from its landlords for the deal that would allow it to significantly reduce the number of restaurants it runs, and negotiate lower rents for many of those left over.

If landlords approve the deal, it will leave the firm’s leisure arm with about 160 sites.

It will also allow it to exit about 25 restaurants which have already been closed.

Vapiano

(Image: Manchester Evening News)

The Italian fast-casual chain Vapiano went into receivership in April and advisors from Duff and Phelps were officially appointed as administrators.

However, a new group was formed to save a chain of restaurants in July.

The restaurant group’s director Mario Bauer acquired the global Vapiano brand and franchising rights, along with a number of restaurants in Germany, France, Luxembourg and Australia.

A joint venture of investors and a newly-formed enterprise called Savour Group – made up of representatives from a trio of investing families – made a successful bid for the UK business.

Vapiano has restaurants in Edinburgh, London and Manchester but the partnership could lead to more openings in other cities.

Carluccio’s

(Image: PA)

The Italian chain collapsed in March but 30 restaurants were later bought out of administration by Giraffe and Ed’s Easy Diner owner Boparan Restaurant Group.

However, administrators FRP Advisory said the move has also resulted in the redundancy of 1,019 Carluccio’s employees after it was unable to secure the future of the chain’s other 40 restaurants.

The value of the deal has not been disclosed, but is believed to be around £3million.

Phil Reynolds, joint administrator and partner at FRP, said: “The Covid-19 lockdown has put incredible pressure on businesses across the leisure sector, so it has been important to work as quickly and as decisively as possible in an extremely challenging business environment to secure a sale.”

Filmore and Union

(Image: Newcastle Chronicle)

Five Filmore and Union restaurants closed permanently after the brand’s owners placed the business into liquidation.

Documents filed at the London Gazette for Filmore and Union Restaurants Ltd show that Filmore and Union has shut for good at Ilkley, Wetherby and in John Lewis stores in Newcastle, Nottingham and York.

The closures come just over a year after they were bought out of administration by new owners Coffeesmiths Collective. It is not known how many employees have been made redundant.

The food and drink firm operated the John Lewis restaurants independently from the department store chain, which has said it is weighing up options for the empty cafes.

A John Lewis & Partners spokesperson said: “We are disappointed that Filmore and Union will no longer operate in John Lewis York, Nottingham and Newcastle.

“We are currently exploring opportunities as to how we might use these spaces going forward.”


Business Live – West Midlands