TRG said its offer valued Wagamama at £559m and it would convert some of its existing sites into Wagamama restaurants. It plans to expand the pan-Asian chain and pilot its ‘food-to-go’ offerings.
Wagamama will be run as an autonomous division of the Enlarged Group. Emma Woods, who is currently the chain’s chief growth officer, will become the CEO, and Allan Leighton, the current chairman of Wagamama, will join the TRG board as a non-executive director.
This year, TRG has reported a loss in sales across its brands which include Frankie and Benny’s and Chiquito and recently put nine of its sites up for sale. On the other hand, Wagamama has defied the sector’s woes. In its last financial results in August, the company said it “traded ahead of the competition consistently for over four years” when it reported 7.4% like-for-like sales growth in the year to 29 April 2018.
After 42 weeks’ trade in 2018, TRG’s total sales were 0.5% down on the comparable period in 2017 and like-for-like sales were 2.2% down. Since its half-year results announcement at the end of August, TRG said it has “continued to make good progress”, and like-for-like sales were up 1.4% in the 14 week period following the end of the World Cup.
Andy McCue, TRG CEO, said: “This transaction is an exciting and transformative opportunity to create a business which can pursue a truly multi-pronged growth strategy and create substantial value for our shareholders.
“Wagamama is a fantastic brand, with a market leading pan-Asian proposition, which has consistently outperformed the casual dining market in recent years. Central to this success has been a cohesive culture and clear brand values which are focused on making the right choices for customers.”
He added: “The transaction not only gives us a great brand but also creates a business with a multi-pronged growth strategy which will enhance earnings with continued selective UK rollout, accelerated via conversions of some TRG sites; by further leveraging the brand in concessions both in the UK and internationally; by maximising the opportunities presented by the rapidly growing delivery sector; and by optimising the potential within international markets.”