THE UK operator of TGI Fridays has entered administration, leaving the fate of 87 restaurants, including key locations in Wales, hanging in the balance. This move comes as Hostmore, which operates the brand in the UK, scrambles to sell its chain across the country.
In a recent development, administrators from Teneo have been appointed after plans to acquire the US-based parent chain fell through earlier this month. The collapse of these plans has cast a shadow over the future of the beloved American-inspired restaurant chain.
Among the affected branches are popular Welsh locations in Swansea, Cardiff and Newport. The staff now face uncertainty.
Hostmore has expressed hope in completing the sale of the UK restaurants by the end of September. This would not only keep the TGI Fridays brand alive on British high streets but also potentially save approximately 4,500 jobs across the UK. However, the company has cautioned that it does not expect to recover any significant value from the sale, indicating potential financial shortfalls for creditors and banks.
The uncertainty extends to whether a buyer will be found for the entire chain or only parts of it. This raises concerns about the potential closure of some of the 87 UK branches. TGI Fridays, which first opened in the UK in Birmingham in 1986, has become a familiar name in towns and cities nationwide.
Currently, the restaurants continue to operate as usual while the administration process unfolds. The collapse of the London-listed hospitality firm came after plans to merge with the US-based TGI Fridays Inc. for £177 million were abandoned. This merger would have created a larger entity remaining listed in London, but it was called off following a management change that would have prevented Hostmore from collecting royalties from the TGI Fridays brand.
Hostmore’s financial woes have been exacerbated by a 12% drop in sales this year compared to the previous period, attributed to unusually warm weather and weak consumer spending. The company’s share price plummeted by more than 90% following the announcement, leading to its suspension from the London Stock Exchange.
Hostmore’s brief tenure as a public company has been fraught with difficulties since its debut in November 2021. Its share price, which started at 147p, has suffered a dramatic decline due to profit warnings, mounting debts, and underperforming restaurants.
Russ Mould, investment director at AJ Bell, described the collapse of Hostmore’s expansion plan as a significant blow, suggesting little to no value left for shareholders. He noted that the US acquisition would have significantly increased Hostmore’s scale and given it a major presence in America, freeing it from an existing restrictive franchise deal.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, highlighted the potential for the brand’s survival, citing its continued operation in over 50 countries and loyal customer base. However, she suggested that a new owner might need to significantly reduce the number of UK outlets, focusing on successful locations like London’s Leicester Square.
The story of TGI Fridays began in New York in 1965, founded by Alan Stillman. It became a sensation known for its unique “Thank God It’s Friday” ethos and flair bartending. The brand expanded to the UK in the mid-1980s, bringing its Americana-inspired décor and menu to a new audience.
As the administration process continues, the full list of UK outlets at risk of closure includes:
- Aberdeen Beach
- Aberdeen Union Square
- Ashton-under-Lyne
- Barnsley
- Basildon
- Birmingham
- Birmingham NEC
- Bluewater
- Bolton
- Bournemouth
- Bracknell
- Braehead
- Braintree
- Brighton Marina
- Cabot Circus
- Castleford
- Cheadle
- Chelmsford
- Cheltenham
- Cheshire Oaks
- Coventry
- Crawley
- Cribbs Causeway
- Croydon
- Derby
- Doncaster
- Durham
- Edinburgh
- Enfield
- Fareham
- Fort Kinnaird
- Gateshead
- Glasgow Buchanan Street
- Glasgow Fort
- Gloucester Quays
- Halifax
- High Wycombe
- Jersey
- Lakeside Quay
- Lakeside Retail Park
- Leeds Junction 27
- Leeds Wellington Bridge Street
- Leeds White Rose
- Leicester
- Lincoln
- Liverpool One
- Liverpool Speke
- London Leicester Square
- London Stratford City
- London the O2
- Manchester Royal Exchange
- Meadowhall
- Metro Centre Gateshead
- Milton Keynes
- Milton Keynes Stadium
- Newcastle Eldon Square
- Newport Friars Walk
- Northampton
- Norwich
- Nottingham
- Prestwich
- Reading
- Romford
- Rushden Lakes
- Sale
- Sheffield
- Silverburn
- Solihull
- Southampton Retail Park
- Staines
- Stevenage
- Teesside
- Telford
- Trafford Centre
- Trinity Leeds
- Walsall
- Watford Central
- Watford North
- Wembley
- West Quay
The uncertainty surrounding TGI Fridays’ future in the UK has left many customers and employees anxious. While the brand has weathered many storms over the decades, it remains to be seen if it can survive this latest challenge and continue serving up its iconic American cuisine to British diners.