Doubts for the fu­ture of town fast food chain

RESTAU­RANT GROUP TO CLOSE OUT­LETS AF­TER STRUG­GLING TIMES

Hull Daily Mail - - THE BUSINESS - By Phil Win­ter philip.win­ter@reach­plc.com

THE fu­ture of Gourmet Burger Kitchen in Bev­er­ley has been thrown into doubt as the food chain an­nounces it is to close one in five of its restau­rants.

The group, which has a restau­rant in the Flemingate Shop­ping Cen­tre, has lined up a Com­pany Vol­un­tary Ar­range­ment (CVA), as it pre­pares to close 17 un­der­per­form­ing stores.

Around 250 jobs are ex­pected to be af­fected by the clo­sures, but de­tails of which stores will dis­ap­pear have yet to be re­vealed.

Der­rian Nadauld, man­ag­ing di­rec­tor at 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.”

Gourmet Burger Kitchen was bought by South African-based Fa­mous Brands in 2016 for £120m.

The com­pany said ear­lier this month that it would take a pre-tax im­pair­ment charge of £47.2m due to the brand’s sus­tained un­der-per­for­mance.

Fa­mous Brands has pre­vi­ously un­veiled sting­ing losses at the burger chain.

Cred­i­tors will now vote on the pro­posed clo­sures at a meeting on Novem­ber 9. All restau­rants will con­tinue trad­ing in the mean­time.

Store clo­sures at Gourmet Burger Kitchen would rep­re­sent the lat­est in a long line of ca­sual din­ing firms to shut restau­rants this year.

Gau­cho, Hum­mus Bros, Prezzo, By­ron and Jamie’s Ital­ian have all fallen on hard times as costs have rock­eted off the back of the Brexit-hit pound, while con­sumer con­fi­dence has nose­dived as the econ­omy fal­ters.

Alex Probyn, pres­i­dent of UK ex­pert ser­vices at real es­tate ad­viser Al­tus Group, said: “There has been huge growth in the ca­sual din­ing mar­ket, with restau­rant num­bers up 15per cent over­all since 2010.

“The race for space has pushed up rents im­pact­ing on rate­able val­ues. Ex­tra tax for busi­ness rates cou­pled with ris­ing food prices and staff costs through in­creases in both the na­tional and min­i­mum wages are cre­at­ing a po­ten­tially lethal cock­tail as mar­gins are squeezed.”

Gourmet Burger Kitchen op­er­ates more than 80 stores and em­ploys 2,000 peo­ple.

At the time of its takeover in 2016, Fa­mous Brands said that fears of a Brexit ef­fect on the eat­ing-out mar­ket “ap­pear neg­li­gi­ble”, adding that it would look to ex­port the Gourmet Burger Kitchen brand to South Africa.

Gourmet Burger Kitchen in Bev­er­ley faces an uncertain fu­ture

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