Gourmet Burger Kitchen announces CVA plans
Gourmet Burger Kitchen (GBK) is proposing a company voluntary arrangement for its UK estate – an insolvency process that will allow it to close stores and cut rents as part of a turnaround plan.
Under the CVA, GBK has identified 17 restaurants for potential closure, affecting 250 jobs. Its remaining 68 restaurants will trade as normal.
It has appointed Grant Thornton to advise on the CVA. The creditor vote will be held on 9 November.
Gourmet Burger Kitchen (GBK) is proposing a company voluntary arrangement for its UK estate – an insolvency process that will allow it to close stores and cut rents as part of a turnaround plan.
Under the CVA, GBK has identified 17 restaurants for potential closure, affecting 250 jobs. Its remaining 68 restaurants will trade as normal.
It has appointed Grant Thornton to advise on the CVA. The creditor vote will be held on 9 November.
GBK said in recent months it had undertaken “significant steps towards” an operational restructuring, including securing the reduction of head office and other key overheads, the facelift refurbishment of 30 restaurants, and implementing a rebrand.
Derrian Nadauld, managing director of GBK, 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.
“We have held constructive discussions with our key landlords and strategic partners and will now seek creditor approval on our CVA proposal. This will provide greater security for our staff, suppliers, landlords and customers.
“GBK is a fantastic brand and with the strength of our core estate, we are confident the company will emerge stronger from this process.”
Matthew Richards, director at Grant Thornton, said: “The casual dining trading environment in the UK remains extremely challenging, driven by a change in dining behaviour, long-term consumer trends and increased competition.
“The CVA will provide a stable platform upon which management’s turnaround plan can be delivered. We have fully engaged with the British Property Federation and its members and their views are reflected in what we believe is a fair proposal to restructure the property obligations of the company.
“It is important to stress that no restaurants will close immediately and employees and suppliers will continue to be paid on time and in full.”
Stephanie Pollitt, assistant director of real estate policy at the British Property Federation (BPF), added: “These situations are never easy as property owners need to take into consideration the impact on their investors, including those protecting pensioners’ savings, as they vote on the CVA proposal.
“GBK have, however, demonstrated best practice, engaging with the BPF early in the process, but ultimately, it will be for individual property owners to decide how they will vote on the CVA.”
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