Gourmet Burger Kitchen has confirmed it will close 17 restaurants as Famous Brands, the company that owns Gourmet Burger King, files for a Company Voluntary Arrangement (CVA).
While the plan still needs approval, the company has not confirmed which restaurants will close but warned 250 jobs were at risk.
In September, the Bedford Independent broke the news locally that Famous Brands, had said one of their brands may face ‘strategic options’. In a statement to shareholders at the time, they said: “Famous Brands is giving consideration to strategic options relating to a subsidiary that may have a material impact on the price of the company’s share price. Shareholders are requested to exercise caution when dealing in the company’s shares.”
Managing director Derrian Nadauld blamed high property rent, adding “We are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability.”
Famous Brands recently filed losses of £2.24m in the 22 weeks to 29th July 2018, that’s triple the amount compared to the same period in 2017. Anthony Clark, an analyst at Vunani Securities, has commented in recent months that GBK is “the septic wart on the overall business and should be cut out.”
The news follows the closure of Prezzo owned MEXico, not even a year after the new Riverside North development had officially been opened.
A CVA is an insolvency option that allow companies to close unprofitable stores to pay off debt while keeping the company trading.
We have contacted Gourmet Burger Kitchen for comment.