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(Sharecast News) - Hostmore, which owns the UK franchise of TGI Fridays, said on Wednesday that it was filing for administration.
The news came less than two weeks after Hostmore said it was abandoning its pursuit of TGI Fridays after it lost an important revenue stream. It said at the time that it expected the company to be wound up and delisted, with TGI Fridays continuing its operations in the UK under new ownership.
Hostmore said the filing of administration will have no direct impact on the operations of its trading subsidiary, Thursdays.
"Unfortunately, all of the board's efforts to implement a lasting solution to support the long-term financial future of the business came against a highly challenging trading and macroeconomic backdrop, and efforts to create value for shareholders through the proposed acquisition of TGI Fridays, while well-advanced, encountered adverse events outside of the board's control," it said.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: "It's a highly unwelcome Wednesday for the chain inspired by the expression Thank God It's Friday. Its owner Hostmore has thrown in the towel and appointed administrators after plans to buy the chain collapsed last month.
"TGI Fridays bounded onto the UK restaurant scene in the mid-eighties with its Americana inspired décor and menus sating the appetite for US cuisine dining. UK consumers were in the middle of a love affair with all things American, with the brat-pack films top billing in cinemas, and Madonna and Whitney Houston top of the charts.
"Almost 40 years on, plenty of other rivals have stolen a march on its menu, the once unique décor seems dated and Asian fusion food seems to be a bigger draw for younger diners."
Streeter said that even though the chain had focused on reducing costs, and significantly reducing losses from unprofitable stores, it wasn't enough to keep the business afloat.
"Clearly there was still a certain level of loyal love for the chain from long-time fans with guest scores having risen to record levels, but the turnaround wasn't sharp enough to lure enough people through the doors," she said.
"Given the brand recognition, it's continued operation in more than 50 other countries, and the level of loyal custom, it's unlikely to disappear from the UK scene completely. However, a new owner is likely to significantly reduce the number of outlets across the UK, and focus on its more successful restaurants such as in London's Leicester Square."