Matthew Smith and Robert Harding, partners from Deloitte, have been appointed joint administrators of Gaucho Grill Ltd, Gioma (UK) Limited and Cau Restaurants Ltd, the operators of a chain of restaurants specialising in Argentinian steaks which has collapsed, putting over 1,200 jobs at risk
Cau, which is the more casual dining offer, was launched in 2010 and has 22 restaurants, while the more upmarket Gaucho chain, offering fine wines as well as steaks, has 12 outlets in London plus others in Birmingham, Leeds, Manchester, Edinburgh, Dubai and Hong Kong. The business is owned by the private equity firm Equistone.
The administrators have announced the immediate closure of the 22 Cau restaurants, with the loss of 540 jobs. Gaucho’s other UK sites will remain open while a buyer is sought for that part of the business, which employs around 700 staff.
Matt Smith, joint administrator and Deloitte partner, said: ‘Unfortunately the Cau brand has struggled in the oversupplied casual dining sector with rapid overexpansion, poor site selection, onerous lease arrangements and a fundamentally poor guest proposition all being factors in its underperformance.
‘As such, the decision has been made to close this loss-making part of the group with immediate effect, unfortunately resulting in today's redundancies.’
Smith said that Gaucho was still trading well and had strong customer loyalty.
A spokesman for Gaucho said: ‘Despite an extensive process which attracted proposals from a number of parties, it is with regret that, due to the complexities of the group’s legal structure, ongoing underperformance at Cau and the level of indebtedness, the directors have been unable to find an agreed, solvent solution.’
A spokesperson for Equistone said: ‘Equistone has been a supportive majority shareholder to Gaucho Group since its investment in 2016, working closely with the company to address the challenges presented by the adverse trading conditions that have negatively impacted the UK casual dining sector as a whole.
‘Despite Equistone having presented Gaucho’s lenders with, and committed to funding, a business plan that would have maintained the company as a going concern, we understand that a notice of intention to appoint administrators has been submitted.’
The restaurant chain’s difficulties indicate ongoing problems in the dining-out sector, which has seen several high profile companies seek to reorganise via company voluntary arrangements or closing some branches. Byron, Prezzo, Jamie’s Italian and Carluccios are just some of the high street names to have been forced to retrench.
Report by Pat Sweet
