Administrators have reportedly reached a deal to save over 2,000 jobs at the UK branch of the TGI restaurant chain.
Calveton & Breal Capital, the private equity owners of upmarket restaurants such as Le Pont de la Tour, Quaglino’s, and Coq d’Argent, are reportedly on the verge of purchasing up to 55 out of the chain’s 87 UK-based restaurants. This could provide employment to almost half the 4,500 staff.
Sky News reported that a possible deal could be reached as soon as Monday. It is expected to include existing leases as well as the right to use TGI Fridays in the UK.
Calveton Capital and Breal would be able to add another food outlet to their growing portfolio. It would however be a departure for the 40 upmarket restaurant they own under the D&D London label that they purchased last year. This includes German Gymnasium Alcazar, and Bluebird Chelsea.
Teneo, an advisory firm, was appointed as administrator by the parent company of TGI Fridays, Hostmore, less than one month after it failed to improve the fortunes of the chain.
Hostmore stated in September that they hoped to sell the company by the end October. It warned, however, that any sale would likely generate less money than the debts of £35m.
The restaurants continue to run as usual as administrators scramble to get a good deal.
TGI Fridays, a chain of restaurants founded in New York in 1965 by a group friends, combines classic American cuisine such as hamburgers with a lively and casual atmosphere. In 1994, it opened in the UK and built a large-scale chain. It was then taken over by private equity group Electra Partners. Electra Partners will spin out TGI’s owner, Hostmore, in 2021 and list it on the London Stock Exchange.
Hostmore’s board stated last month that the company had “inherited very challenging circumstances”. They said that reducing annual expenditure by PS12m and reducing losses in unprofitable shops, as well as improving customer service, had not been sufficient to save it.
Hostmore stated in September that, “Unfortunately, the board was unable to achieve its goal of implementing a solution to ensure the financial stability of the company, given the challenging macroeconomic and trading environment. Moreover, the efforts made to create value for the shareholders by acquiring TGI Fridays were hampered by adverse events beyond the control of the board.”
Hostmore shares are no longer traded.
Teneo declined comment. Calveton Capital and Breal Capital were not immediately available for comment.
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