Gourmet Burger Kitchen restructuring will not affect Irish business

Restaurant chain Gourmet Burger Kitchen (GBK) said its plan to restructure the UK operation in the face of mounting losses would not affect the Irish business.

The company, which operates five outlets in Dublin, filed for a form of bankruptcy protection on Wednesday to avoid insolvency, the latest big retail name to fall victim of weak consumer spending and high costs.

The chain’s parent, South Africa’s Famous Brands, said the board of GBK had initiated a company voluntary arrangement (CVA) for the business that would allow it to avoid insolvency or administration and ensure its continued existence.

The company said its proposals to restructure the UK business were part of an ongoing turnaround strategy, amid a challenging casual dining environment.

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"This arrangement is with landlords of our UK restaurants and has no impact on the separate GBK legal trading entity in Ireland, " it told The Irish Times.

Property rates

Famous Brands bought GBK in 2016 but its contribution to group profitability has taken longer than the company initially anticipated, hampered by pressure on consumer spending as well as factors ranging from higher property rates, increased input costs and an oversupply of restaurants.

"The CVA process has the objective to ensure financial viability and the sustainability of the business into the future," it said in a statement, adding it had assistance of accountants Grant Thornton for the process.

A string of UK retailers have either gone out of business or announced plans to close shops this year as they struggle with the tough business climate. – Additional: Reuters