Deloitte has confirmed, today, that Steak restaurant Gaucho has gone into administration. This comes after rescue talks for the 16-outlet chain failed. The subsidiary restaurants of CAU are all to close with the loss of 550 jobs
This comes after weeks of talks regarding a possible sale. Hugh Osmond, the restaurant entrepreneur, was a potential buyer. However, all proposals came to nothing meaning insolvency is looking inevitable.
The company have a 7-figure tax bill for HMRC needing paying, as well as £50 million owed to their banks.
The decline and financial difficulties have come after CAU (the sub-brand of steak restaurants owned by Gaucho) saw huge declines, overexpansion, poor site selection and troublesome lease agreements. Several months ago, Gaucho founder, Zeev Godik stepped down and so a new management team was appointed, with hopes to stabilise their financial position, however, the limited experience they had in the restaurant sector, implies their difficulties. Gaucho did previously want to put CAU into a Company Voluntary Arrangement.
Gaucho are not the first casual dining chain to have suffered. Jamie's Italian, Byron, Cote, Prezzo and Carluccio’s have also been hit. Restaurants have closed, jobs have been cut. This turmoil has all been put down to rising costs and cautious consumer spending, which has also hit at the retail industry, affecting household retailers, Carpetright, Marks and Spencer’s and PoundWorld.
Worried about poor cashflow? Feel you have got into a bit of a mess? Covid-19?, How to pay wages on pay day? For reassuring advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539
Please note that the guide includes updates due to Covid-19 For instance there have been some changes to insolvency legislation that limits creditors actions. A new 20 day moratorium for distressed businesses has also been introduced.