SOUTH AFRICA – South African restaurant franchisor, Famous Brands has offloaded its long-time struggling British fast-food operation, Gourmet Burger Kitchen (GBK) to Boparan Restaurant Group (BRG), a UK based restaurant group owner.
The deal comes days after GBK had entered administration, looking for buyers after becoming the latest victim of brutal trading conditions in the face of Covid-19 which made Famous Brands cut funding to it.
The purchase being a rescue deal, according to administrator Deloitte is said to save 35 restaurants and 669 jobs.
However, more than 360 people will be made redundant with the closure of 26 sites as part of the pre-pack deal funded by BRG.
“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.”Gavin Maher – Joint Administrator at Deloitte
“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,” Gavin Maher, Joint Administrator at Deloitte, said.
“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,” he added.
Prior to the pandemic, GBK UK operated 62 restaurants and employed nearly 1,300 staff.
GBK joins Boparan’s brand portfolio which also includes the Cinnamon Collection, Fishworks, Carluccio’s, Slim Chickens, Giraffe and Ed’s Easy Diner.
The purchase gives Boparan a 99-strong portfolio of restaurants in UK with 32 franchised globally.
“We welcome the GBK team to BRG. This latest acquisition is in line with our strategy to grow our restaurant group with quality brands.
“Whilst it is an extremely challenging time for the sector, we believe quality hospitality businesses will recover in the long term as people return to eating out,” said Satnam Leihal, managing director of Boparan Restaurant Group.
GBK was founded in London in 2001 by three New Zealanders, including chef Peter Gordon.
Famous Brands bought the chain for £120m in 2016 with a view to grow the business but its contribution to group profitability has taken longer than the company had expected.
Its UK sales for the 26 weeks to August 27 were down a little more than 66% in sterling terms.
Famous Brands, also recently sold its controlling 51% stake in boutique café brand, tashas, to the founding Sideris family, who hold the remaining 49%.
The sale is in line with the group’s three year-strategic roadmap which includes a narrower focus of investment of resources in the Signature brands portfolio.
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