D&D London owners in talks to save TGI Fridays
Breal Capital and Calveton, which acquired restaurant business D&D London last year, are looking to take on the high street restaurant chain, according to Sky News.
The deal would likely to see the new owners taking over the majority of its TGI Fridays 89 sites, but a significant number of jobs are expected to be lost as part of the process.
One analyst told Sky News that between 50 and 60 TGI Fridays sites were commercially viable, which they said was likely to mean the new owners would be able to save roughly three-quarters of TGI Fridays’ current UK workforce of about 3,200 people.
The potential rescue deal for TGI Fridays comes after Hostmore, the parent company, filed for administration having abandoned its all-share acquisition of TGI Fridays’ US business after the US group lost control of TGIF Funding, which holds legal title to the franchise agreement royalties and other various fees and revenue from intellectual property of the TGI Fridays business.
“The board inherited a very challenging set of circumstances,” said Matthew Bibby, CFO of Hostmore.
“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 £12m, 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.”
It is unclear how much Breal and Calveton are willing to pay for TGI Fridays in the UK, although one industry source told Sky News that they were confident in the company's ability to run a slimmed down version of the business successfully.
“They are seasoned hospitality people,” the source said.
The deal is understood to include the chain’s existing leases and the right to use the TGI Fridays brand in the UK.
