Gourmet Burger Kitchen has confirmed that it is seeking a company voluntary arrangement (CVA) and has earmarked 17 restaurants for closure with the likely loss of 250 jobs. They have not disclosed which ones these will be. The creditors meeting is scheduled for the 9th November. The chain has 100 outlets and will be looking for rent concessions on them most likely.
The CVA would be used as means of an insolvency process, to close outlets and cut rents. Landlords are required to agree to a rent reduction, or face having 'loss-making' sites closed.
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Deloitte were appointed last month, in addition to CBRE, property consultant, advising.
GBK have been under speculation for a while - In July, the firms South African owner, Famous Brands, reported taking ''strategic options relating to a subsidiary''. In August, the burger brands' losses widened to £2.2m, highlighting under-performance.
Derrian Nadauld, the burger chain’s managing director, said: “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”.
GBK are not the first to suffer from the adverse trading environment within the casual dining sector. Property rates, labour and food costs are believed to explain the struggling restaurant environment. Byron’s Burgers, Carluccio’s, Jamie’s Italian and Prezzo have already used CVAs to help them survive.
If you are a worried employee then see our guide for employees