Will Gourmet Burger Kitchen be the next high street casualty?
The Sunday Times reports that the burger brand has appointed restructuring advisers at Deloitte to consider its options.
This could result in the chain entering a Company Voluntary Agreement (CVA), with the closure of some of its 100+ restaurants.
Speculation has been mounting about GBK’s future after Famous Brands, its South African owner, reported that operating losses had tripled to £2.24m in the 22 weeks to 29 July 2018, compared to the previous year.
Like-for-like sales fell 10.6%, compared to a 2.6% decline in 2017.
In a Cautionary Announcement issued in August Famous Brands warned shareholders it was considering “strategic options relating to a subsidiary”, which was speculated to be GBK.
A step backward
GBK has already scaled back its planned openings this year and begun refurbishing sites following disappointing sales. BigHospitality’s sister site MCA reported in May that this transformation plan included simplifying the menu and moving away from an exclusive delivery partnership with Deliveroo to link up with other providers.
The chain has also faced beefed up competition in the gourmet burger market.
Former GBK CEO Alasdair Murdoch - who has since defected to Burger King - told MCA last year the chain had been hit by "significant" expansion of its competitors. Within two years of opening GBK Glasgow a Byron, Five Guys and Handmade Burger Co had all launched within walking distance, he said.
When Famous Brands bought GBK for £120m in 2016 it said it saw “substantial growth potential” for the then-75-strong restaurant group.
But in August the company said GBK had struggled with “difficult trading conditions” in the UK. Brands including Jamie’s Italian, Prezzo and burger rival Byron have all closed restaurants this year amid a turbulent time for the high street.
GBK was founded in Battersea, London in 2001 with the backing of New Zealand chef Peter Gordon.
It was acquired by Yellowwodds Group in 2010 leading to its rapid expansion. Over 90% of its portfolio has either opened or been refurbished since 2011.
