Gourmet Burger Kitchen axing 362 jobs and shutting 26 restaurants for good despite rescue sale
- Casual dining sector struggling under sporadic lockdowns and falling profits
- Pizza Hut and Pizza Express are also big-names which have announced closures
Gourmet Burger Kitchen is closing 26 restaurants and axing 362 jobs, despite being saved from administration.
The casual dining chain has been snapped up in a rescue deal by Boparan Restaurant Group, which also purchased Carluccio’s out of insolvency earlier in the pandemic.
GBK said it had started to see improvements in trading last year after a major restructuring process in 2018, which saw it shut a raft of sites.
Tough times: Gourmet Burger Kitchen is closing 26 restaurants and axing 362 jobs, despite being saved from administration
But, the company, which had been owned by South African group Famous Brands, said it slid into administration after the Covid-19 pandemic hit its liquidity and potential to be sold as a solvent business.
The likes of Pizza Hut and Pizza Express have also announced permanent restaurant closures and job cuts in recent months, as they battle to lure in diners spending more time at home amid sporadic lockdowns.
GBK has now been sold in a pre-pack administration deal after working with insolvency specialists at Deloitte.
It said the move will save 35 sites and 669 jobs from its original network of 61 restaurants and 1,031 employees.
Gavin Maher, joint administrator at Deloitte, said: ‘As with a number of dining businesses, the broader challenges facing “bricks and mortar” operators, combined with the effect of the lockdown, resulted in a deterioration in financial performance and a material funding requirement.
Closures: Pizza Hut is closing 29 of its restaurants, with 450 jobs set to be lost
‘We have been working closely with the management team under very difficult market conditions to try and find a funding solution and I am glad to be able to announce the rescue of this well-loved brand together with a large proportion of the sites and workforce.
‘However, it’s clearly disappointing that a number of sites have had to close resulting in today’s redundancies.
‘We would like to thank all of those involved in the transaction, including our legal advisers, DLA Piper, and wish the management team, workforce and the new owners, Boparan Restaurant Group, every success in now taking the business forward’
It is the latest expansion in dining for Boparan, which is owned by ‘Chicken King’ Ranjit Boparan and also owns the chains Giraffe and Ed’s Easy Diner.
Last month, Pizza Hut became the latest in a string of casual dining chains to announce job cuts and restaurant site closures.
Pizza Hut announced plans to shut 29 restaurants and cut hundreds of workers in a hammer blow for the ailing sector.
The chain, which has 244 restaurants up and down the country, confirmed that 450 jobs will be at risk as a result of the closures.
The company is negotiating a company voluntary arrangement restructuring deal after it faced ‘significant disruption’ from the pandemic.
Pizza Hut put forward the proposals as ‘sales are not expected to fully bounce back until well into 2021’ despite a quick and safe reopening of sites.