UK restaurant chain The Real Greek is set to close nine of its sites and shed 151 jobs, despite a rescue deal that has saved the majority of its estate following the business’s fall into administration.
The group, which was founded in London in 1999 and has become a familiar presence on the UK casual dining scene, has been partially acquired by the owners of Côte Brasserie as part of a restructuring aimed at stabilising the business.
However, the deal agreed on Friday means only 19 of its 28 UK restaurants will continue to trade under new ownership, with nine locations earmarked for closure.
The acquiring company, Karali Group, said it had stepped in following the administration of Japanese restaurant group Toridoll, which owns The Real Greek’s parent company Fulham Shore.
Under the terms of the rescue, 358 of the chain’s 509 staff will be retained, but 151 roles will be made redundant. Industry sources also indicated that the brand’s central kitchen operation will be shut as part of the restructuring.
The collapse marks a further setback for Fulham Shore, which had already been reviewing the future of The Real Greek as part of a wider restructuring programme across its portfolio. Last month, the company launched a company voluntary arrangement (CVA) for sister brand Franco Manca, which will result in 16 restaurants closing and 225 jobs being lost.
Marcel Khan, chief executive of Fulham Shore, said: “The transaction will ensure that the business is placed on a more sustainable footing for the future, while allowing The Fulham Shore to focus its energy and investment behind Franco Manca and its significant growth potential. We’re pleased to be handing it over to Karali with real momentum.
“We will now do everything we can to support colleagues affected by this process and believe that both the brand and its teams will be in very good hands as the business moves into its next chapter.”
The latest closures underline the continuing strain on the UK casual dining sector, which has faced rising costs, shifting consumer demand and sustained pressure on margins since the pandemic.
While the partial sale provides a degree of continuity for the remaining sites, the scale of job losses and closures highlights the fragility that mid-market restaurant groups still face as they attempt to restructure and reduce overheads.
Toridoll said: “In recent years, high levels of inflation in the UK, driven by rising energy and food prices together with increase in labour costs resulting from rises in the minimum wage, have created a more challenging operating environment for the hospitality industry than initially anticipated.
“The deterioration in the economic environment has had a more significant impact on the Greek restaurant brand The Real Greek than on the Franco Manca business.”
Paul Berkovi, managing director at administrators Alvarez & Marsal, said: “We have worked closely with The Real Greek’s management team and are pleased to have completed a transaction that secures a future for a restaurant group enjoyed by diners over many years.
“Our immediate focus as administrators will be to provide a smooth transition for the business and to support employees affected by site closures. We are grateful to all stakeholders for their constructive engagement throughout this process.”
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