Chicken chain Wingstop fires up sale of British operation

by Admin
August 3, 2024

Wingstop, the quick-service chicken chain which is Britain’s fastest-growing restaurant operator, is hoisting a “for sale” sign over its UK business.

Sky News has learnt that the company, which is majority-owned by the trio of entrepreneurs who brought it to Britain in 2018, has hired Goldman Sachs to find new owners.

City sources said the sale had been initiated in response to unsolicited expressions of interest from potential buyers.

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Goldman is understood to have begun issuing information about Wingstop UK – whose parent company is called Lemon Pepper Holdings – to third parties in the last couple of weeks.

The likely valuation of the business was unclear this weekend.

The sale is being launched as Wingstop prepares to launch its 50th outlet in the UK.

It is aiming to have 57 sites open by the end of the year, with substantial room for further growth even in a market saturated by competitors.

Sources said the company believed it could ultimately reach between 400 and 500 sites in Britain.

Wingstop has also become one of the industry’s biggest employers in the UK, with a workforce of about 2,200 people.

The chain has gained a cult following for its variety of flavours, which include Louisiana Rub and Mango Habanero.

Celebrity fans reportedly include the rappers Central Cee and Stormzy.

It is positioned as a premium alternative to KFC, and competes with the likes of Nando’s and Popeyes, which has also been accelerating rapidly in recent years.

Chick-fil-A, the third-largest quick-service restaurant (QSR) chain in the US, has also announced plans to enter the British market, saying last year that it would open its maiden UK site in early 2025.

That announcement may explain the timing of Wingstop UK’s owners’ decision to launch a sale process now, with greater competition likely to maintain pricing pressure on chicken chains.

Wingstop’s first UK site opened at Cambridge Circus in central London in 2018 after Tom Grogan, Saul Lewin and Herman Sahota persuaded the brand’s American owner to sign a deal with them despite their lack of restaurant industry experience.

Wingstop’s US-headquartered business is listed in New York, and has a market capitalisation of close to $11bn (£8.6bn).

Its shares have more than doubled in the past year.

The American company also owns 20% of the UK operation, having acquired it in 2021 in a reflection of its belief in its growth prospects.

Wingstop’s trajectory in Britain belies that of a casual dining sector which has been under pressure since the onset of the pandemic.

Chains such as Carluccio’s, Prezzo and Pizza Hut were either forced into insolvency or savage restructurings which saw hundreds of site closures and thousands of redundancies.

Wingstop’s British operation is also partly owned by an unidentified outside investor.

A spokesman for Wingstop UK declined to comment on Saturday.