D&D London’s owners are currently in talks to buy TGI Fridays’ UK operations after its parent company Hostmore collapsed into administration last week.
Breal Capital and Calveton, the investment firms that bought D&D London last year, are in advanced talks over a UK franchise operation for TGI Fridays.
Industry sources said the potential purchase of TGI Fridays’ UK operations by Breal Capital and Calveton could see the new owners take over the majority of the 89 sites.
Despite this, however, a significant number of job losses can be expected.
One analyst estimates that only 50 to 60 TGI Fridays locations are commercially viable, suggesting that around three-quarters of the current UK workforce, around 2,400 out of 3,200, could be retained under the new ownership.
It appears that a new company, Calverton Texas Ltd, was incorporated on Monday, September 23rd.
Hostmore, the parent company of TGI Fridays in the UK, announced last week that it would apply for administration, but the company clarified that this would not affect its trading subsidiary, Thursdays (UK) Limited. However, Hostmore himself understood that he had filed a notice yesterday of his intention to appoint administrators.
In a statement to the London Stock Exchange last week, Hostmore said: “The board inherited very challenging circumstances, but a focus on reducing costs, reviewing the group’s capital allocation policy and implementing changes to both the board and senior management meant the group was able to reduce annual costs by £12m, significantly reduce unprofitable stores losses and to operate the group’s stores with the best efficiency in the industry, while customer scores improved to the highest level on record.
Unfortunately, all of the board’s efforts to implement a sustainable solution to support the company’s long-term financial future took place in a very challenging trading and macroeconomic environment, as well as efforts to create additional value for shareholders through the proposed acquisition of TGI Fridays. -advanced, observed adverse events that are not under the government’s control.”
While the exact amount that Breal Capital and Calveton are likely to pay for TGI Fridays UK remains uncertain, industry insiders appear to be optimistic about their ability to effectively manage a streamlined version of the business.
The deal is expected to include TGI Fridays UK’s existing leases and rights to use the TGI Fridays brand in the UK.
The collapse of Hostmore, the UK parent of TGI Fridays, comes less than six months after it agreed a £177m deal to merge the US restaurant business of TGI Fridays with London-listed Hostmore.
