Gourmet Burger Kitchen poised to enter CVA

The chain, owned by South Africa’s Famous Brands, has filed for a company voluntary arrangement (CVA), a process that will be administered by Grant Thornton, with approximately 250 staff potentially affected by the closures.

GBK operates about 80 restaurants in the UK and employs 2,000 people. While 17 branches have been earmarked for closure, no outlets will close immediately and the remaining 68 stores will trade as normal. “Every effort” will be made to redeploy affected staff, GBK said.

GBK is the latest in a long line of restaurant chains to face closures this year, after Gaucho, Prezzo and Jamie’s Italian among those to have been affected.

Famous Brands said in a statement on its site: “The CVA process has the objective to ensure financial viability and the sustainability of the business into the future.

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

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.”

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.”