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TGI Fridays operator falls into administration as it scrambles to sell chain
18/09/2024
The UK operator of TGI Fridays has gone into administration as the hospitality firm scrambles 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 could save the jobs of approximately 4,500 staff employed across the UK.
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.
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.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “TGI Fridays bounded onto the UK restaurant scene in the mid-eighties with its Americana-inspired decor and menus satiating the appetite for US cuisine dining.
“Even though the chain had focused on reducing costs and significantly reduced losses from unprofitable stores, it wasn’t enough to keep the business afloat.
“Given the brand recognition, its continued operation in more than 50 other countries and the level of loyal custom, it’s unlikely to disappear from the UK scene completely,” Ms Streeter added.
She suggested that a new owner could “significantly reduce the number of outlets across the UK, and focus on its more successful restaurants such as in London’s Leicester Square”.
Published: by Radio NewsHub