Argentine-themed steakhouse group Gaucho has entered administration after its lenders opted against a proposed rescue deal.
Matt Smith and Rob Harding, restructuring partners at Deloitte, have been appointed as joint administrators to the main holding and operating companies of the Gaucho and Cau restaurant chains.
The company’s advisers had been trying to find a buyer for the 39 restaurants in the Gaucho and Cau chains.
However, high debt levels and a complex legal structure meant it had been unable to find an "agreed, solvent solution", a spokesperson said.
Cau was launched in 2010 and has 22 restaurants, while Gaucho, which specialises in Argentinean steaks and fine wine, has 12 restaurants in London, with others in Birmingham, Leeds, Manchester, Edinburgh, Dubai and Hong Kong.
In particular, Cau has suffered from negative like-for-like sales for three years, the administrators said, and as such, they confirmed the immediate closure of all the UK Cau restaurants, resulting in around 540 redundancies.
Gaucho is the latest in a string of high street dining and retail chains to run into trouble. High street brands such as Maplin and Poundworld have already collapsed this year, while restaurant chains such as Jamie’s Italian and Prezzo have also shut branches and cut jobs.
A spokesperson for Gaucho said: “Despite an extensive options process which attracted proposals from a number of parties, it is with regret that due to the complexities of the group’s legal structure, ongoing underperformance at Cau and the level of indebtedness, the directors have been unable to find an agreed, solvent solution.
“Consequently, the directors have today filed in court a notice of intention to appoint an administrator for the business. Until such time as the administrator has been appointed and agreed plans with management, it is business as usual.”
Matt Smith, joint administrator, commented: “Unfortunately the Cau brand has struggled in the oversupplied casual dining sector with rapid over-expansion, poor site selection, onerous lease arrangements and a fundamentally poor guest proposition all being factors in its underperformance. As such, the decision has been made to close this loss-making part of the group with immediate effect, unfortunately resulting in today’s redundancies.
“The Gaucho business on the other hand, which operates in the premium dining market, continues to trade well in its market segment, is profitable and has a strong underlying brand and guest loyalty."