Jamie’s Italian won’t be the last chain to collapse after failing to implement a CVA, leading property expert Christie & Co is predicting.
At least three major restaurant operators have already resorted to Company Voluntary Arrangements in the first half of this year.
Patisserie Valerie was the biggest headline name to fall, but for reasons beyond a downturn in its fortunes on the high street which forced it into administration.
In March, Boparan Restaurant Group sought to close 27 of its Giraffe and Ed’s Easy Diner branded restaurants.
Most recently, Jamie’s Italian fell into administration after failing to turn the business around following the CVA process in 2018.
In its latest Business Outlook report, Christie & Co stated: “The failure of many household names on the high street continues, as House of Fraser continues to close stores and stalwarts such as M&S and Boots have now also listed closures on the high street over the next two years.
“More operators are expected to turn to CVAs or fall into administration throughout the remainder of the year, as many continue to report falling or marginal like for likes. Christie & Co predicts at least one CVA will fail where the business cannot be turned around by the end of the CVA period, in a case similar to Jamie’s Italian.”
Its report notes that restaurant operators are increasingly having to restructure their offers to attract consumers, including introducing all-day offerings or adopting a more casual approach to the dining experience, such as restricted table service or part self-service.
Irrespective of the challenges, both newcomers and established operators have found new opportunities for growth.
Loungers, Franco Manca and Mowgli have committed to further expansion, taking advantage of stressed landlords.
The fastest expanding brand in the market is M&B’s steak offering, Miller & Carter, which surpassed 100 sites in 2018 and has its sights set on expanding to 150, targeting both large pubs and retail space.
New concepts, such as street food markets, pop ups and box parks, have also adopted a strong position in the current market, as consumers seek an authentic and interesting offering. Current big players include Boxpark, Market Halls and Time Out, all of which are currently planning new openings across the UK and Europe.
Simon Chaplin, senior director – corporate pubs and restaurants at Christie & Co, said: “Secondary high streets are beginning to suffer as mid-market casual dining operators retreat back to the safety of major cities and towns, following a period of expansion from 2014 to 2017. There is still growth and opportunity for operators at either end of the market. Ivy, Miller & Carter and others are expanding to create quality dining experiences, whilst local operators and street food vendors are finding good demand with casual, informal food offers.
“Pubs are also entering the market, increasingly introducing high quality food offers, and it’s no surprise that 12 of the top 100 UK restaurants are actually pubs. It’s an exciting time for the market, despite challenges, and we look forward to seeing the sector continue to adapt and evolve over the coming months.”