As South African owners say they are not going to cover losses
The reopening of Gourmet Burger Kitchen (GBK), which has a branch within Westfield London in Shepherd's Bush looks less likely after a statement by their owners that they will not be continuing to fund the chain.
GBK, which is based on the site of the former Chiswick Restaurant at 131 Chiswick High Road, is owned by South African based company Famous Brands who bought the business in 2016 for £120 million.
According to a report in Big Hospitality magazine, a specialist industry publication, Famous Brands have stated that they will no longer be providing funding to GBK. They acknowledge that this may result in ‘further financial impairment’ of their investment in the company which they have already had to write down the value of.
GBK already went through the Company Voluntary Arrangement (CVA) process before it closed for the lockdown on 21 March. Through this they reached an agreement for a reduction in rents and interest payments with landlords and creditors and closed some loss making branches in 2018. The Chiswick branch survived the cull despite a business rates assessment of £62,000 per annum and the opening of a branch of Honest Burgers nearby. The CVA had allowed it to reduce its operating losses significantly.
Big Hospitality quote small caps analyst Anthony Clark as saying, “when you withdraw funding for a struggling business it is signalling its death knell.”
We contacted GBK’s head office for comment but have not received a reply.
April 20, 2020