Boparan acquired bulk of Gourmet Burger Kitchen for £6m: Boparan Restaurant Group (BRG), which earlier this year acquired Carluccio’s out of administration, acquired the bulk of the Gourmet Burger Kitchen (GBK) business through a pre-pack administration for £6m, Propel has learned. BRG fought off six other indicative offers for the business, including an offer from Byron. The sale to BRG secured a “go forward” portfolio of 35 sites and 669 jobs – however, there were 26 site closures and 362 redundancies as a result of the administration, which was overseen by Deloitte. As part of an accelerated sales process, seven indicated offers were received for the business, with headline value ranging from £1.2m to £9.6m, all on the basis of a pre-pack administration. Four parties progressed to the final offer stage, which included Byron and BRG. It is understood at this point Byron had offered £5.5m for 38 GBK sites, with £1.1m of that sum deferred for six months, whilst BRG offered £5.6m for 30 sites. By the end of 9 October, both BRG and Byron had submitted best and final bids, with BRG’s standing at £6m on completion (for 35 sites), against Byron’s which was £5m on completion and £1m deferred (for 38 sites). The administrators report states that a key variable between the two bids was that due to the blend of sites the landlord claims would have been higher under Byron’s scenario. The board concluded that the BRG transaction was the only deliverable deal in the process timetable, with all consideration being payable at completion, and likely returns to creditors higher under the BRG terms. As such the GBK board resolved to enter into exclusivity (underpinned by a £1m non-refundable deposit) with BRG. The report states that further correspondence was received by Byron (bidder five) over the course of the following weekend suggesting a further rebid, however, the board decided to proceed with BRG. Total revenues generated by GBK in FY20 stood at £65m down £10.5m (14%) on the previous year. GBK’s largest creditor balance is £31m owed to its shareholder Famous Brands. South Africa-based Famous Brands pushed the button on a sale process for the better burger brand it acquired for circa £120m in 2016, in September. Famous Brands announced in April, it was pulling the plug on its investment. In September, Famous Brands reported system-wide sales at GBK fell 66.2% for the six months ending 27 August 2020 compared with the previous year. At the end of August, 65% of the 67-strong GBK estate had reopened. Famous Brands said the impact of the coronavirus pandemic and resultant national lock-downs and trading restrictions has been “extremely severe” on the business in the UK and South Africa. BRG paid £3.2m to acquire 30 Carluccio’s sites and buy the rights to the brand in May. The GBK sites that now form part of the BRG estate are: Basingstoke, Bath, Belsize Park, Birmingham Resorts World, Brindley Place Birmingham, Bluewater, Bracknell, Brighton, Bristol Cabot Circus, Bristol Cribbs Causeway, Bromley, Cambridge, Chiswick, Clarks Village Somerset, Ealing, East Dulwich, Greenwich, Guildford, Kingston, Lakeside, Leamington Spa, Liverpool, Norwich, O2 Greenwich, Oxford, Putney, South Kensington, St Paul’s, Staines, Trafford Centre, Waterloo, West Hampstead, Westfield London, Westfield Stratford and Wimbledon.
Chancellor to reject plea for additional hospitality support: Chancellor Rishi Sunak is to reject a plea by London’s mayor for a bailout for the capital’s hospitality industry after it was placed into Tier Three. Sadiq Khan demanded extra support for pubs and restaurants amid fears 150,000 jobs could be lost in London after it was placed under the most severe restrictions. He called on the Chancellor to put a compensation scheme in place, guaranteeing to make up all lost income for the festive season based on last year’s returns. But the Treasury said the Chancellor had already announced support for hospitality firms and the funds on offer would not be increased. A source said: “We’ve put in place £280 billion worth of support in this pandemic to protect millions of jobs and businesses. The furlough scheme has been extended through to March and businesses can apply for grants and government-guaranteed loans as well as enjoying VAT holidays and business rates relief.” UKHospitality warned that 150,000 jobs could be at risk if pubs and restaurants were forced to close in the capital. Theatre bosses said the new rules – which will also force them to close venues – will prove ‘devastating’. Khan said: “I don’t want London to be in Tier Three for a day longer than necessary. I am hugely concerned about the negative impact that the additional restrictions will have on jobs and many businesses that are already struggling to stay afloat. We now urgently need much more government support for the sectors of our economy that are being hit the hardest, including hospitality, culture, and leisure. It is crucial that ministers urgently put in place a compensation scheme for all lost income, based on last year’s returns, for any businesses affected by the further restrictions during this crucial festive period.”
Mowgli confirms Edinburgh opening: Mowgli founder Nisha Katona has confirmed plans to open a site in Edinburgh on 22 January – the site was thought to be in doubt. Edinburgh Live has reported Nisha Katona shared an Instagram post discussing her future plans. She wrote: “All being well Cheshire Oaks (will open) February and Bristol late spring, Edinburgh (on) January 22. But I’m looking at whether to go to Glasgow, Brighton and Cheltenham in the next couple of years too. We exist to enrich lives in the cities we go to – starting with the lives of our own teams. Every day I start the morning with the Today programme on @bbcradio4 hoping a minister might accidentally betray some idea of the future. It’s like the Famous Five reading tea leaves. But businesses cannot fold their arms in anxiety – we dig into our own natures, dwell in the optimistic bit and keep fighting. And I see hope, and speedy recovery and an appetite for people to rescue their high streets when they open safely. Maybe this rosy outlook means I’m to be pitied above all. We shall see. But cast your hearts out to all those businesses today who want to stand on their own two feet, create jobs and light up your home towns. It’s a dark silent existence for many right now. And if we do our bit to keep your loved ones in jobs and security, remember us with your hunger when we rise from the ashes won’t you?” A month ago, Mowgli submitted a revised and updated application to Edinburgh city council for a restaurant in the B-listed former Clydesdale Bank branch on Hanover Street.
JD Wetherspoon offer fellow operators posters exposing political folly of lockdown: JD Wetherspoon is offering hospitality operators the opportunity to display three posters it has produced giving an alternative view to the government over covid-19 and lockdown. The articles, which feature in Wetherspoon News, are by eminent doctors, scientists and lawyers. Wetherspoon chairman Tim Martin said: “The articles detail how the government is messing up the economy and also the health of the nation. We were approached by a restaurant owner in Tonbridge asking if he could display them in his restaurant and were happy for him to do so. We are now extending the opportunity to all hospitality operators who wish to download the posters from our website (www.jdwetherspoon.com) and make it available to their customers. Two of the posters do not mention Wetherspoon by name. More than 800,000 jobs have been lost so far, many in hospitality, so it’s vital for political folly to be highlighted.”
CMA launches investigation into airline refunds: The CMA is investigating whether airlines have breached consumers’ legal rights by failing to offer cash refunds for flights they could not lawfully take. The move comes as part of ongoing work by the Competition and Markets Authority (CMA) in relation to holiday refunds during the coronavirus (covid-19) pandemic. The investigation will consider situations where airlines continued to operate flights despite people being unable lawfully to travel for non-essential purposes in the UK or abroad, for example during the second lockdown in England in November. The CMA is aware that, in some cases where flights were not cancelled, customers were not offered refunds even though they could not lawfully travel. Instead, many were offered the option to rebook or to receive a voucher. The CMA recognises that the airlines sector, like many others, is under strain due to the pandemic. However, it is concerned that certain airlines may have breached consumers’ legal rights by failing to offer cash refunds, leaving people unfairly out of pocket, and has therefore opened an investigation to examine the matter further. Andrea Coscelli, chief executive of the CMA, said: “We will be carefully analysing all the evidence to see whether any airlines breached consumers’ legal rights by refusing people cash refunds for flights they could not lawfully take. We recognise the continued pressure that businesses are currently facing, but they have a responsibility to treat consumers fairly and abide by their legal obligations.”
Wagamama reports Third Quarter like-for-likes up 7.4%: Wagamama, owned by The Restaurant Group, has reported like-for-like sales were up 7.4% in its Third Quarter to 27 September, boosted by Eat Out to Help Out. The company stated: “UK revenue decreased 20.8% from Quarter Two 2019 to £70.3 million in Quarter Three 2020 with phased reopening of our restaurants for in dining from early July. The customer initiatives implemented together with the government’s‘ Eat out to help out’ scheme operating throughout August allowed us to drive strong footfall to our restaurants with UK like-for-like sales of 7.4% for the quarter. Adjusted Ebitda increased to £18.1 million. Covid-19 continued to impact on trading. However the group continued to proactively manage costs during the quarter including the negotiation of a number of rent deals which have positively impacted the Ebitda position.” Chief executive Emma Woods said: “We are encouraged by the strong performance of the business in Q3, both for eat in and delivery. This was the last point we were able to trade in any sense normally and provides real confidence that the business can return to market leading performance when restrictions are again lifted.”