The Restaurant Group chief executive Andy McCue is to leave the company “due to extenuating personal circumstances”.
A search will commence immediately and the company said it expects McCue to remain in position while the recruitment process is ongoing.
In an update to the market this morning, the board thanked McCue for his contribution to the business and in particular for leading its transition into higher growth areas, including the recent acquisition of Wagamama. It said McCue would “continue to drive the business forward” while the recruitment process is underway.
Chairman Debbie Hewitt said: “Andy has brought a strong vision, developed a first-class team and laid the foundation of the Company’s transformation. Whilst we are clearly disappointed that he will not be able to provide the long-term leadership for the business, we understand and respect the decision he has made purely on personal grounds.”
McCue said: “In recent years, we have achieved much in a challenging market. I’m confident The Restaurant Group is well positioned with the scale, talent and levers to drive profitable growth. While I recognise that this decision is untimely, it is the right one for me and my family. We have a strong team in the business and a clear plan which we are focused on delivering.”
TRG said current trading remains in line with expectations.
Comment by MCA editor, James Wallin
The Restaurant Group will inevitably try to maintain a positive slant on this imminent change of leadership but there can be no question that this is a serious blow for the company and could not have come at a much worse time.
Although he has only been with the company for two and a half years, so much of its strategy appears to be caught up in his drive and ambition.
Those who know him describe him as extremely intelligent, intuitive and with a relentless focus to succeed in what he sets out to do. Despite having to adapt from the digital, data-driven world of Paddy Power, to the unpredictable nature of a people-focussed business, McCue has set out a bold roadmap to get TRG back on its feet.
His tenure will inevitably be chiefly remembered for the audacious swoop for Wagamama. It is a move that epitomises his single-mindedness and unshakeable confidence in himself to deliver. McCue faced down substantial opposition to such a radical departure from TRG’s core offer and backed himself to continue to sector-smashing momentum that Wagamama has become known for. In many quarters, this was seen as ambitious, in others it was viewed as simple obstinance.
Until the noodle hit the fan, McCue’s strategy had seemed pretty straightforward, and seemed to be generating results. In the ailing Leisure business he refreshed the menus and look of the restaurants and entered a who-will-blink-first approach to aggressive discounting with his peers. It quickly became apparent to the rest of the casual dining sector, that this former betting man was not one to easily fold. The impact of this is still being seen in some of the eye-watering promotions available to anyone visiting a retail park restaurant up and down the country. At TRG it has resulted in volume growth and improved NPS, while the like-for-like sales are beginning to climb.
He was praised for his focus on the concessions side of the business and its Brunning & Price pub arm – the only areas that appeared to have any momentum. Under his watch new deals were signed with operators to expand into the travel hub sector while smart deals were made for B&P. When McCue’s name was mentioned in the end of year M&A round-ups it was, unsurprisingly, for Wagamama but it would be unfair to overlook the purchase of Food & Fuel for the faith it showed in the pub business.
This morning’s announcement indicated that McCue will remain in place “while his successor is being recruited”, however no timeframes were mentioned. The board was presumably unprepared for the news and the chance of finding a credible replacement in the next few months seems slim.
The TRG board is a robust one and both Mike Tye, the former Spirit chief executive and Allan Leighton, who joined the board from his role as chairman of Wagamama, could provide an interim solution if the recruitment process ends up being protracted. However, both would have to divest themselves of other commitments to take on the role fulltime.
The choice of the successor would depend on whether the company feels the need to recruit from within the industry or go for a driven outsider in the McCue mould. In many ways, TRG will be an attractive role to some big beasts. McCue has already done a lot of what David Cameron might term “the hard shit” – with c. 70% of profits now coming from concessions, pubs and Wagamama and Pubs businesses, all of which are in growth mode.
However, the risk of being the CEO who ruined, or even sanitised, Wagamama, will be a deterrent for some, as will the question of whether a brand like Franke & Benny’s can ever be truly relevant again.
The Restaurant Group’s share price has fallen 11% in early trading after the announcement that chief executive Andy McCue is to leave for personal reasons. A search will commence immediately and the company said it expects McCue to remain in position while the recruitment process is ongoing. Chairman Debbie Hewitt said in an update this morning: “Andy has brought a strong vision, developed a first-class team and laid the foundation of the company’s transformation. Whilst we are clearly disappointed that he will not be able to provide the long-term leadership for the business, we understand and respect the decision he has made purely on personal grounds.” McCue said: “In recent years, we have achieved much in a challenging market. I’m confident The Restaurant Group is well positioned with the scale, talent and levers to drive profitable growth. While I recognise that this decision is untimely, it is the right one for me and my family. We have a strong team in the business and a clear plan which we are focused on delivering.” Includes comment by MCA editor James Wallin on McCue’s legacy at TRG and the challenges of replacing him.