Wagamama, Frankie & Benny's and Chiquito owners in The Restaurant Group (TRG) have announced that a further 23 stores will close by the end of May, as the company endeavours to rapidly cut costs.
Shares in TRG surged this morning, after the brand hailed 'good progress' on recent cost-cutting endeavours - with the company announcing back in March that 35 loss-making restaurants would be culled to boost profits across the board.
In their latest trading update, TRG revealed that they expect to save in the region of £5m a year through their moves to slash costs.
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The hospitality firm, which runs 410 venues, also announced that they will speed up the closure process - with 23 restaurants across the UK to close permanently by the end of May, after negotiating the number of contracts ahead of schedule. In a statement, they said: "The combination of current trading and incremental cost savings achieved provides confidence that TRG is tracking ahead of management expectations on its medium-term margin accretion and deleveraging plans."
TRG also revealed that like-for-like sales grew by two per cent at Wagamama through the first quarter of this year - with a five per cent rise for pub arm and 37 per cent growth across concessions, amid a recovery in airport passenger numbers. Meanwhile, Wagamama sales grew nine per cent over the four weeks leading up to April 30, with a sales decline in leisure sites slowing to one per cent.
The group also noted that 'favourable' property market conditions are providing new opportunities for fresh Wagamama outlets on good rental terms. TRG hopes to accelerate opening plans for the chain - which dishes up pan-Asian cuisine - with as many as eight sites set to open in 2024. This is a figure up from previous plans of five sites.
Analysts at Barclays said that: "The statement is strong across the board, with trading holding up well despite consumer spending headwinds."
Pressure is piling to improve profits for investors from activist investor Oasis Management, which owns a 12.3 per cent stake in the group at present. Meanwhile, elsewhere Hostmore revealed additional cost-cutting plans which aim to save their own business an additional £4.1m annually.
It is understood that a small portion of head office and supply chain workers will be affected by the proposals. The group, which owns the Fridays chain, previously also announced a £1.8m-per-year savings plan. Today, the group also told investors that interim boss Julie McEwan will take over as the group's permanent chief executive.
She joined the company from Las Iguanas operator The Big Table Group last year.
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