After reporting a £47m loss amid tough trading conditions, Gourmet Burger Kitchen (GBK) has announced it will seek a Company Voluntary Arrangement (CVA) with 17 restaurants earmarked for closure - a fifth of its portfolio.
Owner Famous Brands has appointed accountants Grant Thornton to pursue the CVA. Matthew Richards, director at Grant Thornton, said that no restaurants will close immediately and employees and suppliers will continue to be paid in full.
The potential closures will impact 250 jobs and the company has said “every effort will be made” to redeploy staff should they choose. The closures would leave the group with a 68-site estate.
Recent months have already seen the cutting of head office costs and overheads as well as the refurbishment of 30 restaurants and a rebrand.
Richards 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.' He added that GBK's CVA would provide a 'stable platform' on which management could turn the business around.
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.”
GBK joins Gaucho, Hummus Bros, Prezzo, Byron and Jamie's Italian in the fight to deal with rising costs and falling consumer confidence.