The casual dining industry has experienced a somewhat turbulent time of late. Ever changing consumer habits, increased levels of competition and increased costs are just some of the factors which explain the rationale behind this trend. The effects have been felt not only by smaller outfits but also by restaurants and chains which are household names.
In 2018 Jamie’s Italian, Prezzo and Carluccios to name but a few were some of the well-known chains which had to restructure their businesses and enter into company voluntary arrangements (CVAs) in an attempt to steady the ship and save their businesses.
The trend has continued into 2019.
Boparan Restaurant Group (BRG), the owner of Giraffe and Ed’s Easy Diner, entered into a CVA and saw the closure of approximately one third of its sites, whilst all but three of Jamie Oliver’s 25 UK restaurants were closed after its CVA ended and it entered administration.
In August 2019, Brazilian-themed casual dining chain Cabana Restaurants entered administration. The Business Support and Insolvency team at Boyes Turner acted for KPMG in their roles as the joint administrators in negotiating and securing the sale of the chain’s business and assets to a third party buyer. The sale meant that five Cabana Restaurants based in Covent Garden, O2, Wembley and the Westfield Stratford and White City shopping centres could remain open, which in turn led to the preservation of over 150 jobs.
The Business Support and Insolvency team were assisted by colleagues in the firm’s Commercial Property and Employment teams on niche property and employment matters which arose during sale negotiations.
With the last two years showing that even big-name restaurants are not immune from the downturn in the casual dining industry, it is difficult to believe, particularly pitched against a backdrop of uncertain times ahead for businesses and consumers alike, that there will not be more casualties within the restaurant industry before 2019 is out.
For more information about how the Business Support and Insolvency team can help your business contact Oliver Fitzpatrick by email at [email protected].
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