One of Britain’s best-known restaurant groups is poised to be added to an accelerating deluge of high street closures as Gaucho examines plans which could put more than 700 jobs at risk.
Sky News has learnt that the Argentine steak chain has drafted in one of the “big four” accountancy firms to advise on options for Cau, Gaucho’s casual dining brand, which trades from more than 20 sites across the country.
Insiders said on Thursday that the company was looking at a range of outcomes, including a company voluntary arrangement (CVA) that would require the approval of landlords and other creditors.
If it does proceed with a CVA, which would be overseen by KPMG, it could spell the end for all 22 Cau-branded restaurants, with about 750 jobs under threat.
The process is at an early stage but provides fresh evidence of the brutal trading environment on Britain’s high streets for restaurant operators and retailers.
“As part of a comprehensive strategic review, the group’s new management team with the support of its shareholders, is at the early stages of exploring a number of financial restructuring options,” a Gaucho spokesman said.
“No decisions have yet been made.”
A source insisted that a CVA was only one of the options being considered and suggested it was less likely than other potential routes to shedding loss-making restaurants.
Cau is said to have seen double-digit declines in like-for-like revenues which have accelerated in recent months.
One insider said the sales trend had been evident even as executives had decided to press ahead with further site openings.
The Gaucho-branded estate, which comprises 16 restaurants, is said to be performing “in line” with the broader restaurants sector, and is not under threat of closure.
Gaucho is owned by Equistone, a private equity firm, and recently appointed a new management team in an attempt to stabilise its financial performance.
The company’s founder, Zeev Godik, stepped down several months ago.
He was replaced by Oliver Meakin, who joined from Maplin, the electricals retailer which itself plunged into administration earlier this year.
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By pursuing a restructuring that involves shutting restaurants, Gaucho will join rival casual dining chains such as Byron, Cote and Prezzo, all of which have confirmed similar plans in recent months.
A combination of rising costs and more cautious consumer sentiment has hit casual dining businesses, while retailers including Carpetright, New Look and Poundworld have also been forced to press ahead with plans to axe scores of shops.
Source: Sky