Coronavirus: Mexican food chain Wahaca to close more than a third of restaurants due to pandemic
The chain will "try and save jobs" wherever possible聽after deciding rental costs make some city centre sites "untenable".
Wednesday 26 August 2020 19:40, UK
Mexican restaurant chain Wahaca has become the latest food business to suffer due to the coronavirus pandemic, with more than a third of its outlets in the UK closing.
In an email to staff, the chain's founders said they will "try and save jobs" wherever possible as 10 of the firm's 28 sites will shut.
The group, which was founded by former Masterchef winner Thomasina Miers and Mark Selby, said on Wednesday that four London branches, as well as outlets in Bristol, Liverpool and Manchester, have been targeted for closure.
They said rent, as a percentage of sales, in its city centre locations, had increased dramatically following a "significant" hit to cash reserves over the past four months, most of which was during the coronavirus lockdown.
As a result, a number of those restaurants had become "untenable", they added.
The group said it will focus on sites it believes will not lose money, even if sales are significantly reduced, in order "to avoid putting the entire business and every job at risk".
Wahaca said it is considering a Company Voluntary Arrangement (CVA) restructuring deal in order to facilitate its cost-saving plan.
The announcement comes after a number of dining chain rivals, such as Byron Burger and Pizza Express, have announced permanent closures in the aftermath of the lockdown.
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Last week, the pizza chain announced it was closing 73 of its branches, putting 1,100 jobs at risk.
Other restaurant operators, including the Cafe Rouge owner Casual Dining Group, Prezzo and Carluccio's, have also been forced by the COVID-19 crisis to call in insolvency practitioners or explore sale processes.
In addition to wage and loan support, the government has aimed to help the wider hospitality sector through its Eat Out to Help Out initiative, which has resulted in more than 35 million taxpayer-funded discounted meals to date.
The Wahaca restaurants which will permanently shut are:
Bluewater, Kent
Bristol
Brixton, London
Charlotte Street, London
Chichester
Kentish Town, London
Liverpool
Manchester
Southampton
St Paul's, London