Wagamama will be sold to The Restaurant Group for a reported £559 million. Multiple reports today state that The Restaurant Group (TRG) will pay £357 million, while assuming £202 million of debt.
The Restaurant Group is one of Britain’s biggest high street restaurant groups, parent brand to chains such Garfunkel’s, Frankie and Benny’s, Chiquito, and various other satellite franchises. Its TRG Concessions wing recently partnered with the Soho dive bar, Spuntino, ahead of an airport roll-out.
Wagamama, the 200-site Japanese and pan-Asian chain, founded by celebrated restaurateur Alan Yau in 1992, remains one of the country’s most popular. It is one of a small number of U.K. chain restaurants to have remained largely unaffected by the so-called casual dining downturn, which has forced the likes of Byron, Jamie’s Italian, Prezzo, Carluccio’s, Gourmet Burger Kitchen, and Strada to restructure and close restaurants. This year, Wagamama opened seven new restaurants in the U.K.
Indeed, TRG said Wagamama — “a differentiated, high growth brand with clear structural advantages” — had “consistently and significantly outperformed its core UK market.” Its acquisition is thought to be designed to sure up the overall portfolio, since some of the group’s brands are either underperforming in line with the challenging market conditions or do not represent the expansion opportunities presented by Wagamama’s enduring popularity.
Andy McCue, chief executive officer at TRG, said that “Wagamama is a fantastic brand, with a market leading pan-Asian proposition, which has consistently outperformed the casual dining market in recent years. Central to this success has been a cohesive culture and clear brand values which are focused on making the right choices for customers.”
TRG has identified growth areas, such as takeaway-only concessions and the “piloting of pan-Asian cuisine ‘food-to-go’ offering” through delivery, while installing Wagamama restaurants in more travel hubs and replacing existing sites within the portfolio.
“The transaction not only gives us a great brand but also creates a business with a multi-pronged growth strategy which will enhance earnings with continued selective UK rollout, accelerated via conversions of some TRG sites; by further leveraging the brand in Concessions both in the UK and internationally; by maximising the opportunities presented by the rapidly growing delivery sector; and by optimising the potential within international markets,” McCue added.