Gaucho, the popular Argentinian steakhouse chain, has collapsed — and appears poised to close a majority of its portfolio of restaurants, in what looks like the latest blow to Britain’s high street and casual dining sector. Gaucho has 16 sites in the U.K. — including 11 in London — while sister brand Cau has 22 across the country.
Sky News reports that the company could go bust as early as this afternoon (Wednesday). Sky has learned that the companies’ “lenders opted not to pursue a rescue deal” — which could have meant either a cut-price sale, or an agreement to close a number of under performing sites, in the way that Carluccio’s Byron, Jamie’s Italian, and Prezzo have been spared complete collapse.
A spokesperson for the company said that no “solvent solution” could be agreed by its potential buyers. Gaucho owes in the region of £1 million in tax to HMRC; while the company’s combined debts with its lenders is closer to £50 million, according to Sky. Much of that is attributed to what is described as the “ongoing underperformance” of Cau.
The company spokesperson’s issued the following statement today.
Despite an extensive options process which attracted proposals from a number of parties, it is with regret that 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.
Consequently, the Directors have today filed in court a Notice of Intention to Appoint an administrator for the business. Until such time as the administrator has been appointed and agreed plans with management, it is business as usual.
Regarding the some 1,500 employees, “spread broadly equally between Gaucho and CAU brands,” the spokesperson said that a decision about their “future will be taken by the administrators once appointed.”
Gaucho, like so many of its high street competitors, was first reported to be in trouble in May of this year — when it was revealed the company had sought advice and appointed the financial services company KPMG to assess options for future of Cau, which had been underperforming in the market. At that point, however, Gaucho itself, less the wider company, was reported to be in good health, and remained unaffected by the headwinds affecting its sister brand.