LONDON/JOHANNESBURG (Reuters) - The Boparan Restaurant Group (BRG) has taken over British-based chain Gourmet Burger Kitchen (GBK) in a rescue deal that will save 35 restaurants and 669 jobs, administrator Deloitte said on Wednesday.
However, more than 360 people will be made redundant with the closure of 26 sites as part of a pre-pack deal funded by BRG, Deloitte said.
Earlier on Wednesday, South African owner Famous Brands FBRJ.J said the GBK restaurant chain had entered administration after becoming the latest victim of brutal trading conditions in the face of COVID-19.
“We have been working closely with the management team under very difficult market conditions to try and find a funding solution,” said Gavin Maher, Deloitte’s Joint Administrator.
“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.”
The burger chain is the latest to have succumbed to the impact of the coronavirus pandemic on the back of already challenging trading conditions on the British high street.
In May, BRG, which also owns the Giraffe and Ed’s Easy Diner brands, rescued the Anglo-Italian restaurant chain Carluccio’s, buying 30 of its sites in the United Kingdom, although 40 others were closed.
Famous Brands bought GBK in 2016 but its contribution to group profitability has taken longer than the company had expected, hampered by pressure on consumer spending as well as high property rates, increased input costs and a highly competitive restaurant market.
Shares in Famous Brands were down 2.8% at 1315 GMT.
GBK had reopened 37 of its 62 UK stores for full service by Aug. 13 and one of its five stores in Ireland.
Famous Brands said in April that it would not provide further financial support for GBK because of uncertainty over when restaurants would reopen after the UK coronavirus lockdown imposed the previous month.
Its UK sales for the 26 weeks to Aug. 27 were down a little more than 66% in sterling terms, Famous Brands said in a September trading statement.
Reporting by Michael Holden in London and Nqobile Dludla in Johannesburg; Editing by David Goodman and Jan Harvey
Our Standards: The Thomson Reuters Trust Principles.