Gaucho cuts 540 jobs with closure of Cau
GAUCHO Group will make 540 staff redundant at its UK Cau restaurants after collapsing into administration.
Administrators at Deloitte have decided to close all of the UK Cau sites, which are loss making, and instead “focus on maximising the value achievable in the Gaucho business, which is profitable and underpinned by a strong brand”. All of the Gaucho sites will continue to trade as usual while administrators attempt to find a buyer for the business.
They said they would also seek to find potential buyers for the Cau sites.
The company employs 1,500 staff across both chains.
Matt Smith, joint administrator, said: “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.”
He added: “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.”
The company, which has 16 Argentina-themed Gaucho restaurants and 22 Cau sites, appointed administrators after its private equity owner Equistone failed to reach an agreement with creditors.
Gaucho Group drafted in accountancy giant KPMG earlier this year to help it assess the future of the Cau chain, including a company voluntary arrangement, and an offer from Equistone to buy creditors’ debt stakes, but was unable to reach an agreement.
The company also sought buyers for the business, to no avail.
A Gaucho spokesman said: “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.”