Little Chef to close 67 restaurants

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, it announced today.

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 issued today, 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.”

Mr Sims said he had briefed staff at Little Chef’s Sheffield headquarters this morning, and similar briefings were being held across the country.

“We wanted to do the right thing for all of our teams around the country,” he said.

He said throughout January they would look at vacancies within the more successful branches of Little Chef that are not going to be closed, saying he was confident a number of staff could be “repositioned”.

“It’s a difficult market out there, but we will try and support people locally in the community and the local market, but I do acknowledge it’s quite difficult out there.”

Mr Sims maintained the chain is still a “strong brand” and said he remains enthusiastic about its future despite today’s announcement.

He said the closures would allow the firm to invest more money in its remaining 94 branches, and they would be looking at opening new sites, which could provide job opportunities for those affected by today’s announcement.

“I would certainly consider that. We will be investing in all of our stores in some form during the next 12-month period. So the 94 that remain - the customers will see a difference in all of them to some degree.

“Wherever we can I would be more than happy to talk to those people who have lost jobs.”

He said the New Concept had proved a huge success, with 13 branches having been revamped so far.

“We have taken a lot of advice from Heston Blumenthal and my intent here and my objective in doing this strategic review is to enable us to invest a significant amount of money in upgrading the rest of the 94 stores.

“The new ones are performing very well. It gives us the opportunity not just of offering a sit-down restaurant, but also takeaway, and also bringing in other retail brands.”

Mr Sims would not be drawn on what brands these might be, but added: “I think there’s a lot of things that the travelling British public want apart from the opportunity to have a really good meal.

“There are other brands in the market place where they may have a speciality in a particular food area or things like that so we’ll be looking at that.

He said he remains enthusiastic about the future of the company

“I am leading this charge, and I’m enthusiastic about the future, but today I realise that 500-600 people are losing their jobs,” he said.

“Of course in doing that I am not just protecting 1,500 current employees but I am creating new jobs in the future as we expand again from a much more stable base.”