TGI Fridays operator goes into administration as it tries to sell 87 restaurants
It is not clear whether the company will secure a buyer for the entire chain or whether it will manage to sell some but not all of the restaurants
by PA, Sonia Sharma, Ruby Flanagan · ChronicleLiveThe UK operator of TGI Fridays has gone into administration as the firm attempts to sell its chain of 87 restaurants across the country.
Hostmore said it had appointed joint administrators from Teneo. The company is in the process of trying to sell the UK restaurants to new owners, which it hopes to complete by the end of September.
This would keep the TGI Fridays brand alive on British high streets and save thousands of jobs. But it said earlier this month that it was not expecting to "recover any meaningful value" from the sale of sites, meaning it would earn less from the sale than it owes to creditors and banks.
It is also not clear whether it will secure a buyer for the entire chain, or whether it will manage to sell some but not all of the restaurants. The American-inspired restaurant chain is open as normal while the administration process starts.
In a statement issued to the London Stock Exchange, the Mirror reports, Hostmore said: “The board is immensely proud of all Hostmore colleagues, both in store and in the support centre, who worked tirelessly to execute a turnaround programme over the past 18 months and to deliver a successful result on the proposed acquisition of TGI Fridays, Inc.
“The board inherited a very challenging set of circumstances, but a focus on reducing costs, revising the group’s capital allocation policy and implementing both board and senior management changes, meant that the group was able to reduce annualised expenditures by £12million, significantly reduce losses from unprofitable stores, and operate the group’s stores at a best in class efficiency level for the sector, all while improving guest scores to our highest levels on record.
“Unfortunately, all of the board’s efforts to implement a lasting solution to support the long-term financial future of the business came against a highly challenging trading and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well-advanced, encountered adverse events outside of the board’s control."
The collapse of the London-listed hospitality business comes after plans to buy the US restaurant chain for £177 million fell through earlier this month. It would have merged with US-based TGI Fridays Inc, to create a larger firm that would remain listed in London.
But the takeover plans were dropped after a management change which would have meant it could not collect royalties from the TGI Fridays brand. Hostmore shares tanked by more than 90% after the news earlier in September, as shareholders took the brunt. Its shares are now worth less than 0.2 pence per share.
Its shares have now been suspended from the London Stock Exchange and the public company will be delisted and wound up. TGI Fridays' biggest market is in the US where there are 128 restaurants, including franchised sites, and it operates more than 270 in countries around the world.
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