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Wed 24th Oct 2018 - Gourmet Burger Kitchen to close 17 sites
Gourmet Burger Kitchen to close 17 sites: Gourmet Burger Kitchen is to close 17 of its 85 restaurants, with a potential loss of 250 jobs. The better burger brand has asked landlords and other creditors to support a company voluntary arrangement (CVA) restructuring plan as it admitted it was struggling in a “challenging UK casual dining environment” and its rental payments were too high. Managing director Derrian Nadauld said: “We are having to take tough but necessary actions to reduce our fixed-cost base and restore long-term profitability.” The company is owned by South Africa’s Famous Brands. Matthew Richards, a director at Grant Thornton, which is advising on the Gourmet Burger Kitchen CVA, said: “The casual dining trading environment in the UK remains extremely challenging, driven by a change in dining behaviour, long-term consumer trends and increased competition. It is important to stress that no restaurants will close immediately and employees and suppliers will continue to be paid on time and in full.” Gourmet Burger Kitchen said it had already taken significant steps towards restructuring the way the business operated, including reducing head office costs, refurbishing 30 restaurants and updating its branding. The company made an operating loss of £2.6m in the six months to 31 August, with like-for-like sales down 10.6%. Famous Brands bought the company for £120m in 2016 arguing there was “substantial growth potential”. Famous Brands first cautioned in August that it was considering strategic options for one of its subsidiaries and announced last week it would recognise a pre-tax impairment of 874 million rand (£46m) in its group accounts relating to Gourmet Burger Kitchen. The brand had suffered from “continued adverse trading conditions and sustained underperformance”, Famous Brands said earlier this month.


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