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Gourmet Burger Kitchen to axe 362 jobs and shut 26 restaurants

Gourmet Burger Kitchen is closing 26 restaurants and axing 362 jobs, despite being saved from administration.

The casual dining chain has been snapped up in a rescue deal by Boparan Restaurant Group, which also purchased Carluccio’s out of insolvency earlier in the pandemic.

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GBK said it had started to see improvements in trading last year after a major restructuring process in 2018, which saw it shut a raft of sites.

Tough times: Gourmet Burger Kitchen is closing 26 restaurants and axing 362 jobs, despite being saved from administration

But, the company, which had been owned by South African group Famous Brands, said it slid into administration after the Covid-19 pandemic hit its liquidity and potential to be sold as a solvent business.

The location of the 26 GBK restaurant closures is not yet known. 

The likes of Pizza Hut and Pizza Express have also announced permanent restaurant closures and job cuts in recent months, as they battle to lure in diners spending more time at home amid sporadic lockdowns. 

GBK has now been sold in a pre-pack administration deal after working with insolvency specialists at Deloitte.

It said the move will save 35 sites and 669 jobs from its original network of 61 restaurants and 1,031 employees.

Gavin Maher, joint administrator at Deloitte, said: ‘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.

Closures: Pizza Hut is closing 29 of its restaurants, with 450 jobs set to be lost

Closures: Pizza Hut is closing 29 of its restaurants, with 450 jobs set to be lost

‘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.

‘We would like to thank all of those involved in the transaction, including our legal advisers, DLA Piper, and wish the management team, workforce and the new owners, Boparan Restaurant Group, every success in now taking the business forward.’

It is the latest expansion in dining for Boparan, which is owned by ‘Chicken King’ Ranjit Boparan and also owns the chains Giraffe and Ed’s Easy Diner.

Last month, Pizza Hut became the latest in a string of casual dining chains to announce job cuts and restaurant site closures. 

Pizza Hut announced plans to shut 29 restaurants and cut hundreds of workers in a hammer blow for the ailing sector, which has been beset with financial woes for a number of years.

The chain, which has 244 restaurants up and down the country, confirmed that 450 jobs will be at risk as a result of the closures.

The locations of the closures include Regent Street in Cambridge, King Street in Maidstone and Imperial Park in Gravesend. 

Jobs at risk: Pizza Express is shutting 73 sites for good, putting over 1,000 jobs at risk

Jobs at risk: Pizza Express is shutting 73 sites for good, putting over 1,000 jobs at risk

The company is negotiating a company voluntary arrangement restructuring deal after it faced ‘significant disruption’ from the pandemic.

Pizza Hut put forward the proposals as ‘sales are not expected to fully bounce back until well into 2021’ despite a quick and safe reopening of sites.

Like other chains, Pizza Hut was forced to close all its branches temporarily on 23 March in line with Covid-19 Government guidelines.

The vast majority of its UK restaurants have now reopened, with Pizza Hut taking part in Chancellor Rishi Sunak’s Eat Out to Help Out scheme last month.

Last month, rival chain Pizza Express confirmed plans to shut 73 of its restaurants, putting over 1,100 jobs at risk. 

Sign of the times: 1,000 jobs have been lost at Carluccio's amid 40 restaurant closures

Sign of the times: 1,000 jobs have been lost at Carluccio’s amid 40 restaurant closures

Pizza Express said its sales were hit by the temporary closure of all its restaurants, as well as the cost of reopening them in line with new social distancing and enhanced hygiene measures.

It first announced plans to shut branches and cut jobs in August 2020, but these proposals have now been approved by creditors.

In a sign of how rough the situation remains for the casual dining sector, The Restaurant Group, which owns Frankie and Benny’s, announced earlier this year that it planned to cut up to 3,000 workers after confirming plans to shut 125 sites. 

The Restaurant Group said the closures would fall mainly on its Frankie and Benny’s restaurants, but other chains such as Garfunkel’s and Chiquito are also affected. 

Earlier this year, Italian restaurant chain Carluccio’s was bought out of administration by Boparan.

The deal saved 800 jobs and 30 sites, but 40 restaurants and over 1,000 jobs have been lost, accounting for more than half of the total workforce. 

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Read more at DailyMail.co.uk


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