Boparan Restaurant Group, the owner of Giraffe and Ed’s Easy Diner, has outlined plans to carry out a company voluntary arrangement that would result in the closure of 27 outlets.
Of its 70 sites in total, a further 13 would face rent reductions. Creditors will vote on whether to approve the process on 21 March.
According to Radius Data Exchange, the average store size at Giraffe is 2,813 sq ft, while the equivalent at Ed’s Easy Diner stands at 2,470 sq ft.
Tom Crowley, chief executive of BRG, said: “We have been examining options for the two brands for some time and the CVA is the only option to protect the company.
“The combination of increasing costs and oversupply of restaurants in the sector and a softening of consumer demand have all contributed to the challenges both these brands face.”
KPMG as been appointed to oversee the process. Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, said: “This CVA seeks to address the cost of the company’s leasehold obligations across a number of unprofitable sites and, if successful, will put the business on a surer financial footing.
“Importantly, it constitutes one element of a wider financial and operational turnaround plan which, subject to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder.”
BRG also owns chains including fish and chip brand Harry Ramsden and the Cinnamon Collection.
It is also the UK franchise partner for US-based Slim Chickens.
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