UK Restaurant Chains Franco Manca and The Real Greek Face Major Closures
The UK dining landscape is bracing for a significant blow as two prominent restaurant chains, Franco Manca and The Real Greek, are threatened with substantial closures. Fulham Shore, the firm that owns both high street brands, has issued a stark warning that it may shutter a number of locations across the country.
Underperforming Sites Under Review
Fulham Shore has announced it is considering closing "a substantial number of underperforming sites" for both Franco Manca, a beloved sourdough pizza chain with branches in Birmingham, and The Real Greek, a Mediterranean restaurant chain. This move comes as the company grapples with a challenging economic environment that has severely impacted the casual dining sector.
Parent Company Cites Sluggish Market Conditions
Tordiall Holdings, the Japanese food conglomerate that owns Fulham Shore, pointed to the "sluggish restaurant market" as a key factor driving this potential restructuring. Recent filings published to the Tokyo Stock Exchange earlier this month revealed that both sales and profit for the group have been marked as "bad," according to industry analysts at MCA Insight.
The filings further elaborated, stating, "Although the UK economy is gradually recovering, the restaurant sector continues to lag, and sales for both brands are recovering more slowly than planned." This slow recovery has prompted the company to explore a wide range of restructuring options to strengthen its business amid ongoing soft market conditions.
Strategic Review Underway
In response to these pressures, Fulham Shore has appointed Alvarez & Marsal, a global professional services firm, to conduct a thorough review of strategic options. Marcel Khan, chief executive of Fulham Shore, emphasized in a statement last week that while sales performance across Franco Manca and The Real Greek remains relatively robust, the current macroeconomic environment continues to place significant pressure on parts of the casual dining sector.
Khan stated, "Against this backdrop, Fulham Shore has appointed Alvarez & Marsal to undertake a thorough review of strategic options to ensure both brands are on the strongest possible footing to realise their long-term potential." He added that there is no fixed timetable for this review, and no certainty that it will result in any particular outcome, leaving the future of many locations uncertain.
Glimmers of Hope Amidst Challenges
Despite the grim outlook, there are some positive signs. Pilot stores that have implemented new initiatives have shown "early improvements in both sales and profitability," according to the company's reports. This suggests that innovative strategies could potentially salvage some sites, but the overall trend remains concerning for the broader UK restaurant industry.
Franco Manca, known for its sourdough pizzas and often compared to rivals like Pizza Pilgrims and Rudy's, along with The Real Greek, now face an uncertain future as Fulham Shore navigates these turbulent times. The potential closures highlight the ongoing struggles within the casual dining sector, even as the wider UK economy shows signs of gradual recovery.
