Southside branch could be on list being considered for closure
Gourmet Burger Kitchen (GBK) has become the latest chain restaurant to get into financial difficulties and it is thought possible that a number of store closures will follow with the Southside branch potentially under threat.
The high street burger chain is reported to have appointed accountants Deloitte to set up Company Voluntary Arrangement (CVA) after revealing huge losses and issuing a negative trading statement. However, GBK is denying that branch closures are being considered ‘at this stage’.
A CVA allows the company to talk to creditors about changing the terms of loans and to landlords about altering the terms of existing leases.
When other restaurant chains such as Carluccio’s, Byron and Jamie’s Italian have set up a CVA they have gone through their branches one by one and closed any which they didn’t believe could trade profitably. A CVA does not make closure inevitable; Carluccio’s have stuck with their Putney branch.
Famous Brands, GBK’s parent company, said recently, “Difficult trading conditions persisted across all our markets during the review period, with common features including intensified competitor activity and margin pressure in the context of economic hardship.”
GBK made an operating loss of £2.24m in the 22 weeks ending 29 July 2018 with like-for-like sales down by over 10% The company blames higher business rates, labour and food costs for the increased losses.
The chain was founded in 2001 by three New Zealanders with the first branch opening in Battersea.
September 17, 2018