Gourmet Burger Kitchen (GBK) has appointed financial services company Deloitte to handle a Company Voluntary Arrangement (CVA) for the struggling high street burger chain, which reported huge losses and offered a cautionary statement only last month.
Famous Brands, the parent company which owns GBK, said last month:
Difficult trading conditions persisted across all our markets during the review period, with common features including intensified competitor activity and margin pressure in the context of economic hardship.
Now, according to The Times, with Deloitte as “restructuring advisers,” the burger restaurant chain is considering wholesale closures under the conditions of any proposed CVA, which would follow in the footsteps of Jamie’s Italian, fellow burger group Byron, and Italian high street stalwarts Carluccio’s.
However, GBK has told Eater that those claims are “erroneous” and that the company is not yet considering closures.
GBK’s struggles are, it appears, the result of rapid expansion since 2001 coupled with a stymied approach to the innovation necessary to support that expansion: While competitors with more progressive offerings have grown steadily and newer chains with more defined propositions have also thrived, GBK has remained stagnant. The chain’s struggles — and the struggles of Jamie Oliver, Byron, Carluccio’s and contemporaries — are reflective of the “rents, rates, high street declining, food costs, Brexit, [and] increase in the minimum wage” that Oliver called a “perfect storm.”
They are also reflective of the rapidly rising benchmarks for quality expected of restaurants, particularly in London, and restaurants that fall short in customers’ eyes will lose money, trade, and, eventually, themselves. Conditions are difficult, but it’s also unrealistic to put all the blame on extenuating factors.
Correction 5.09.2018: This article originally stated that GBK was “reportedly in administration,” which was inaccurate.
- Gourmet Burger chain eyes closures [The Times]