Thu, 15 Oct 2020 | BUSINESS SALE
Gourmet Burger Kitchen has been acquired by Boparan Restaurant Group in a rescue deal that will see 26 stores close. 35 sites will continue operating following the acquisition, with around 670 jobs saved, but 362 jobs will be cut at the locations that are to close.
The burger chain was put on the market by former owner Famous Brands after COVID-19 lockdown exacerbated historic difficulties dating back to a 2018 restructuring deal which saw 17 sites close. The company said sales had been improving, but entered administration due to the impact of the virus.
Gourmet Burger King’s administrator Deloitte, announcing the pre-pack sale, said that “COVID-19 and associated lockdown measures have impacted the business’ liquidity, driving the need to find a funding or sale solution.”
Joint administrator Gavin Maher of 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.”
"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.”
Boparan Restaurant Group, owned by poultry tycoon Ranjit Boparan, also owns the chains Ed’s Diner and Harry Ramsden’s, along with meat processing firm 2 Sisters group. During the pandemic, the company acquired insolvent Italian restaurant chain Carluccio’s.
The UK’s saturated fast-casual dining market has been particularly hard hit by the impact of COVID-19 on the UK high street, as BSR covered in this exclusive insight, with well-known chains including Byron Burger, Frankie & Benny’s and Pizza Express among those to close outlets.
In its most recent financial accounts, to the year ended February 24 2019, GBK Restaurants Ltd (which trades as Gourmet Burger Kitchen in the UK and Ireland) reported profits of £0.4 million, up from a £2.1 million loss a year earlier, while its net debt decreased to £28.2 million, having stood at £49.2 million a year earlier.
The company’s revenue, however, decreased 7 per cent to £76.1 million from £81.7 million in 2018, driven by site closures and adverse trading conditions following Brexit. Gross profits declined from £32.7 million in 2018 to £28.1 million in 2019.
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