RCapital completes restructuring of Little Chef and will close 66 restaurants
Private equity company RCapital has confirmed that it has completed the restructuring of roadside restaurant chain Little Chef and will close 66 out of the total of 161 sites, as announced last month.
Some of the restaurants have already closed, while some - such as those where Travelodge, one-time owner of Little Chef, is the landlord - may remain open until September.
The decision to close the 66 restaurants was part of a broader restructuring strategy that included a detailed review of the lease agreements. Rents on many sites were set well above market levels and the confirmation that the closures will go ahead has been prompted by a deadlock in negotiations with a number of landlords.
Little Chef will continue to operate 95 sites identified in January as being consistently profitable. There will be no further job losses beyond the 500 to 600 announced last month.
Jamie Constable, founder of RCapital, said: "Any restructuring of lease commitments is always a complex arena and needs a willingness of the landlord to negotiate. Although we have had some great support from some of our landlords, we have taken the business through a formal re-structuring process to complete the planned closures."
Graham Sims, chairman of Little Chef, added: "This announcement represents a final hurdle in along journey to complete our critical rebuilding process. We are profitable and cash generative and will continue to deliver first rate customer service to our customers. Little Chef is very much open for business."
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By Janet Harmer
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