Usually, when a restaurant chain goes under, it happens in steps.
On The Border, for example, first closed a number of locations, then filed for Chapter 11 bankruptcy. It was purchased during that process and closed a few more locations. Then, its new owner filed for Chapter 7 bankruptcy for the brand, shutting down all but a handful of franchised locations.
It’s rare that a company simply makes the decision to close all its restaurants and exit that business.
Whitbread, a company that operates a number of restaurant chains including Beefeater, Brewers Fayre, Bar + Block, Table Table, Whitbread Inns, and Cookhouse + Pub, plans to close all of its restaurants, a process that began in September.
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“Whitbread has announced that, as part of its proposed new Five-Year Plan, it intends to become a pure-play hotel business focused on Premier Inn, the UK’s number one hotel brand, which is synonymous with quality and value,” the company shared in a press release.
That choice will impact 261 restaurants, and some have already shut down.
Whitbread has already closed its steakhouse chain
Whitbread closed its Bar + Block steakhouse chain on Sept. 3. The restaurant shared a thank you to its customers on its Instagram page.
“From evening cocktails and weekend brunches to indulging in a premium cut of steak, serving you has been an absolute privilege. We are immensely grateful to every guest who came through our doors, and to our passionate team who made every experience unforgettable,” Bar + Block shared.
Bar + Block also shared a message to people staying in the hotels where the steakhouse chain formerly operated.
“Although our Bar + Block restaurants have now closed, our Premier Inn guests can continue to enjoy breakfast, evening meals and drinks in different restaurant spaces, inside or next to every hotel. Visit the Premier Inn website for more information about the food and drink options available to guests,” the company posted.
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A move away from restaurants
Moving away from restaurants was a financial decision for Whitbread.
“We always challenge ourselves to improve and, in light of significant cost increases in the form of business rates and national insurance, as well as the implied market discount to our inherent value, we’ve looked hard at the options open to us to maximise value creation over the medium and long-term,” Whitbread CEO Dominic Paul said, according to Your Local Guardian.
Whitbread isn’t simply shrinking restaurants because they’re difficult to operate. It’s reallocating capital toward Premier Inn because the hotel business generates better returns.
“This plan will transform Whitbread into a higher-margin, higher-returning pure-play hotel business,” he added.
Whitbread did not close all of its restaurants on Sept. 3, although two other chains did close on that day. The company shared the full shutdown schedule.
- Brewers Fayre (89 locations): Closing on Sept. 7
- Beefeater (106): Sept. 10
- Table Table (32): Sept. 3
- Cookhouse + Pub (14): Sept. 3
Whitbread shared its plans for what will happen to many of its restaurant locations.
“This change will involve exiting all of our remaining branded restaurants, which trade under brands including Beefeater and Brewers Fayre, a number of which will be converted into approximately 600 additional Premier Inn rooms, with the remainder expected to be sold as going concerns,” it shared in the press release.
Related: 36-year-old casual dining chain files Chapter 11 bankruptcy
Some Whitbread restaurants have been sold
Of the 261 Whitbread sites earmarked for closure, 53 have been sold to Queensway Inns, which plans to relaunch them as a new chain, Hospitality Week reported.
A source close to the matter said the new owner intend to turn the purchased restaurants into a new line of “value pubs,” The UK Sun reported.
“Subject to completion of the sale and following the relevant TUPE information and consultation processes, around 900 team members could transfer and will be supported through the process,” Your Local Guardian reported.
Exiting restaurants will see 3,800 roles cut across its 30,000-strong U.K. and Ireland workforce and is forecast to reduce its F&B sales by as much as £160m and profits by £10m after the firm’s wider cost-saving measures, according to The Caterer.
Whitbread also plans to offload £1.5b of freehold properties, reducing the overall portion of owned properties across its portfolio from 50% to 30%.
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