Gourmet Burger Kitchen earmarks 17 stores for closure

Gourmet Burger Kitchen (GBK) says it has earmarked 17 restaurants for closure after running up millions of pounds of losses.

The chain, owned by South Africa’s Famous Brands, has filed for a Company Voluntary Arrangement – an insolvency process that allows struggling firms to close unprofitable stores.

It warned 250 jobs were at risk under the plan, which still needs approval.

GBK operates around 80 restaurants in the UK and employs 2,000 people.

Earlier this month, Famous Brands said GBK had booked a £47m loss amid tough trading conditions.

Managing director Derrian Nadauld said the chain faced a “challenging casual dining” market and its rental payments were too high.

“We are having to take tough but necessary actions to reduce our fixed cost base and restore long-term profitability,” he said.

“This [CVA] will provide greater security for our staff, suppliers, landlords and customers.”

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Under the terms of the process, which is being run by Grant Thornton, GBK could close 17 restaurants, although it said every effort would be made to redeploy staff.

Its other 68 restaurants would continue to trade as normal and no outlets will close immediately.

The burger chain is the latest in a long line of casual dining firms to announce store closures this year.

Gaucho, Hummus Bros, Prezzo, Byron and Jamie’s Italian have all fallen on hard times as consumer confidence has slumped, leaving brands with unsustainable overheads.

Matthew Richards, a director at Grant Thornton, said: “The casual dining trading environment in the UK remains extremely challenging, driven by a change in dining behaviour, long-term consumer trends and increased competition.”

He said GBK’s CVA would provide a “stable platform” on which management could turn the business around.