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Little Chef to close 67 restaurants putting 600 jobs at risk

Roadside restaurant chain to shut 40% of its sites but expand its ‘new concept’ sites, based on a revamp by Michelin-starred chef Heston Blumenthal

Roadside restaurant chain Little Chef is to close 67 of its 161 sites in a move expected to lead to the loss of between 500 and 600 jobs.

The sites earmarked for closure have been trading unprofitably for a number of years due to “a variety of economic and locational factors”, the company said, but remaining sites are all trading profitably.

The 500 to 600 jobs lost will be a mixture of full and part-time roles at sites across the country, and will leave a workforce of around 1,500.

Little Chef was saved by turnaround group RCapital when it fell into administration in 2007. RCapital bought the majority of the business and assets, saving 193 of the 235 restaurants and more than 3,500 jobs.

In 2008 several branches were revamped by Michelin-starred chef Heston Blumenthal as part of a Channel 4 show.

In a statement, the firm said the decision to close a number of its sites was not taken lightly, but was “essential” to allow the company to focus on developing its remaining sites, introducing the “New Concept” – revamping restaurants including the “Heston-treatment” – and targeting new sites.

It said the company’s strategic plan was to expand its business by opening and introducing new sites over the coming years. The statement added: “Overall, Little Chef continues to trade strongly.”

RCapital chairman Graham Sims said: “When we acquired Little Chef four years ago we inherited a number of sites with leases that were uncompetitive.

“Despite very hard work from some very committed colleagues we have been unable to lift the performances of these sites to a level where they are viable.

“Consequently, following a thorough review in which we considered all the options, it is with regret that we have had to close a number of sites.

“This means some people’s jobs are at risk throughout the organisation. We will do everything in our power to help every individual find alternative employment within the Little Chef organisation.

“I know this will be tough and an uncertain time for many people in our team.

“By closing these sites we will be able to focus our attention on protecting over 1,500 of our colleagues’ jobs and enabling our investments to be targeted on our remaining strong sites and to develop our brand and our New Concept – towards which the customer response has been very positive.”

The GMB union, which has members at the chain, said the situation showed private equity was a “disaster” for jobs.

GMB senior officer Paul Maloney said: “This is dreadful news for the employees in these restaurants due for closure. Little Chef has had so many owners over the past decade that GMB members have struggled at times to keep up with who owns what.

“What GMB members have had no difficulty in following is the extent to which the private equity owners asset stripped the organisation with the sale and leaseback of land at unaffordable rents which killed off hundreds of restaurants.

“Little Chef has shared the same history as Southern Cross and the pubcos in being financially engineered to death. Private equity has been a disaster for jobs while enriching the multimillionaire elite.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds