South African owners say they are not going to cut losses
The reopening of Gourmet Burger Kitchen (GBK), which has a branch in Wimbledon town centre looks less likely after a statement by their owners that they will not be continuing to fund the chain.
GBK, on The Broadway in Wimbledon, is owned by South African-based company Famous Brands who bought the business in 2016 for £120 million.
According to a report in Big Hospitality magazine, a specialist industry publication, Famous Brands have stated they will no longer be providing funding to GBK. They acknowledge this may result in ‘further financial impairment’ of their investment in the company which they have already had to write down the value of.
GBK already went through the Company Voluntary Arrangement (CVA) process before it closed for the lockdown on 21 March. Through this they reached an agreement for a reduction in rents and interest payments with landlords and creditors and closed some loss making branches in 2018.
Big Hospitality quote small caps analyst Anthony Clark as saying, “when you withdraw funding for a struggling business it is signalling its death knell.”
We contacted GBK’s head office for comment but have not received a reply.
April 17, 2020