14 October 2020 14:36
Restaurant chain Gourmet Burger Kitchen (GBK) is set to close 26 restaurants and axe more then 360 jobs. The major restructuring effort has been made following a rescue deal which sees GBK bought by Boparan Restaurant Group. GBK was sold in a pre-pack administration deal, after working with big four accountancy firm Deloitte. The deal will save 35 sites and 669 jobs from its original portfolio of 61 sites and 1,031 employees. Gavin Maher, joint administrator at Deloitte, said: "As with a number of dining businesses, the broader challenges facing 'bricks and mortar' operators, combined with the effect of the lockdown, resulted in a deterioration in financial performance and a material funding requirement.
"We have been working closely with the management team under very difficult market conditions to try and find a funding solution and I am glad to be able to announce the rescue of this well-loved brand together with a large proportion of the sites and workforce. "However, it's clearly disappointing that a number of sites have had to close resulting in today's redundancies. "We would like to thank all of those involved in the transaction, including our legal advisers, DLA Piper, and wish the management team, workforce and the new owners, Boparan Restaurant Group, every success in now taking the business forward." Before the pandemic GBK was starting to see improvements in its trading last year after it carried out a major restructuring process in 2018. The restructure led to a number of sites being closed. The burger chain was previously owned by South African group Famous Brands but it slid into administration after coronavirus impacted its liquidity and its potential to be sold as a solvent business.
"This latest acquisition is in line with our strategy to grow our restaurant group with quality brands. It was reported last month that GBK's now-former owner, the South Africa-based Famous Brands, had kicked off a process to sell the chain, having withdrawn its funding for the business in April. Owned by Ranjit Singh Boparan, Boparan has a history of snapping up troubled restaurant business. In May the group acquired ailing restaurant chain Carluccio's in a deal worth just £3.4m. Its purchase of GBK gives BRG a 99-strong portfolio of restaurants nationwide, with 32 franchised globally - BRG will continue GBK's franchise partnership in the UAE as part of the deal. Gourmet Burger Kitchen was founded in Battersea, London in 2001 by three New Zealanders with the backing of chef Peter Gordon. It was bought by investment firm Yellowwoods Group in 2010, leading to rapid growth of the chain; and was then subsequently acquired by Famous Brands in 2016, which led to a further period of expansion focused on regional locations outside of the chain's London heartland. The chain eventually underwent a financial restructuring in 2018 in the form of a Company Voluntary Arrangement (CVA), which resulted in the closure of dozens of restaurants.