Worsening trading conditions in Leeds and Manchester have prompted Ego Restaurants to close its businesses in each city.
Ego stopped trading at two of its ten locations - in Albert Square, Manchester and King Street, Leeds - between Christmas and the New Year.
The move came following a refinancing in September, which saw former PizzaExpress chairman Luke Johnson acquire a majority stake in the casual-dining firm alongside chairman James Horler.
Horler told Caterersearch.com that although he and Johnson were keen to grow Ego into a much larger multi-brand business the two restaurants, which opened around 18 months ago and were still making a loss, were proving to be a distraction.
"Both sites had not been open that long and although they were growing revenues we made the painful short-term decision to surrender the leases in two cities that I think may have some issues coming up."
"The North West and North Yorkshire are going to be two areas hardest hit by the cuts in the public sector. We want to focus on London and the South East and the reality is that as and when we get bigger, there won't be that opportunity to surrender the leases," he added.
"There is no intention to do anything other than close these two, which is why we did them simultaneously. We've got eight restaurants now, all of which contribute profits on a unit-by-unit basis and that allows us to get on and be focused on growing the business and being acquisitive rather than having two sites that were not washing their faces."
Ego's strategy will now focus on identifying other businesses to merge with, acquire or partner, so that they can make use of the management experience Ego already has within the business.
Horler previously built up Frankie & Benny's to 65 restaurants between 1995 and 2001, and then acquired the La Tasca brand, growing it to 74 units and selling it to R20 in early 2007.
By Neil Gerrard
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