Not thrilling, but de­cent

Finweek English Edition - - Martketplace -

In a process unique to the UK, Fa­mous Brands* is plac­ing Gourmet Burger Kitchen (GBK) into “com­pany vol­un­tary ar­range­ment”. It is like our lo­cal busi­ness res­cue, but seems to be more fo­cused on rental agree­ments in that GBK will now at­tempt to get land­lords to re­duce rentals on un­der-pres­sure stores, or they can walk away from the rental agree­ment. This is good news, but not of the sort that should make share­hold­ers any hap­pier about the deal. Firstly, I sus­pect that Fa­mous Brands would have tried to sell GBK and could not find a buyer at a price it liked. Fur­ther­more, it shows what a mess the pur­chase was. It does not solve the big­ger is­sue, which is that the UK is mas­sively over-traded with fancy burg­ers – I have seen re­ports sug­gest­ing as many as 150 dif­fer­ent gourmet burger brands cur­rently op­er­ate in the UK. Re­sults for the six months end­ing Au­gust show just how bad the GBK prob­lem is, with the core busi­ness show­ing op­er­at­ing profit be­fore GBK is­sues up 3.9% – not thrilling but de­cent con­sid­er­ing the tough con­di­tions.

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