Grant Thornton takes on Gourmet Burger Kitchen CVA
25 Oct 2018
Casual dining chain Gourmet Burger Kitchen (GBK) has brought in Grant Thornton to handle a company voluntary arrangement (CVA) to restructure its UK restaurant estate as part of its ongoing turnaround strategy, which will place some 250 jobs at risk
25 Oct 2018
Under the terms of the CVA, GBK has 17 restaurants earmarked for potential closure, which would impact around 250 jobs at these sites. The other 68 restaurants will continue to trade as normal.
The CVA creditors meeting will be held on 9 November.
GBK operates about 80 restaurants in the UK and employs 2,000 people. Earlier this month its owner, South Africa’s Famous Brands, said GBK had booked a £47m loss amid tough trading conditions.
Derrian Nadauld, GBK managing director, said: ‘Given the challenging UK casual dining environment and over-rented UK restaurant estate, we are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.
‘We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. This will provide greater security for our staff, suppliers, landlords and customers.
‘GBK is a fantastic brand and with the strength of our core estate, we are confident the company will emerge stronger from this process.’
Matthew Richards and Daniel Smith from Grant Thornton have been appointed as joint nominees to the CVA.
Richards, director at Grant Thornton, 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.
‘The CVA will provide a stable platform upon which management’s turnaround plan can be delivered. We have fully engaged with the British Property Federation (BPF) and its members and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.
‘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.’
Stephanie Pollitt, assistant director of real estate policy at the BPF, said: ‘These situations are never easy as property owners need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal.
‘GBK has, however, demonstrated best practice, engaging with the BPF early in the process, but ultimately, it will be for individual property owners to decide how they will vote on the CVA’.
GBK stated that in recent months the company has undertaken significant steps towards the operational restructuring of the business including securing the reduction of head office and other key overheads, the facelift refurbishment of 30 restaurants and implementing an updated rebrand.
Report by Pat Sweet