Gourmet Burger Kitchen could close some restaurants

A burger chain which has two restaurants in Brighton and one in Chichester could be set to close some of its stores.

Wednesday, 24th October 2018, 5:22 pm
Updated Wednesday, 24th October 2018, 6:00 pm
Gourmet Burger Kitchen, Brighton (Credit: Google Maps)

Gourmet Burger Kitchen (GBK) has restaurants at Brighton Marina, Gardner Street in Brighton and at Chichester Gate.

The burger chain said it has earmarked 17 of its 80-plus restaurants for closure in a move that would affect 250 jobs, but did not confirm which sites face the axe.

It said the move comes ‘amid a challenging casual dining environment’ which has seen other chains such as Prezzo and Jamie’s Italian announce store closures earlier this year.

Derrian Nadauld, managing director of Gourmet Burger Kitchen, 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.”

Famous Brands, the South African company which owns the chain, said it had appointed insolvency experts Grant Thornton.

Matthew 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 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.”

A statement by Famous Brands said: “A decision has been taken by the board of GBK to initiate a Company Voluntary Arrangement (CVA) process with the assistance of Grant Thornton.

“GBK is a wholly owned subsidiary of Famous Brands. GBK is a company registered in England with its main trading operations in the UK.

“The CVA process is unique to the United Kingdom and is a process used by financially distressed businesses in order to come to a binding agreement or compromise with their unsecured creditors.

“Typically, the process is used to restructure a business’s leased property portfolio in line with current market valuations. The CVA process has the objective to ensure financial viability and the sustainability of the business into the future.

“Whilst this process evolves, shareholders will be updated when appropriate and are requested to continue to exercise caution in the trading of Famous Brands shares.”

Gourmet Burger Kitchen said every effort will be made to redeploy staff from the 17 restaurants earmarked for closure, and the other 68 restaurants will continue to trade as normal.