Deloitte to manage Gaucho administration with hundreds of jobs at stake

Deloitte to manage Gaucho administration with hundreds of jobs at stake

Over 500 jobs already lost as Big Four firm moves its focus from Poundworld to the Gaucho group

Following their work around Poundworld’s collapse, Deloitte accountants will embark on a similar challenge with the Gaucho restaurant group.

The Argentinian-themed chain called in the Big Four firm as administrators following a significant decrease in sales across its Cau brand in particular.

Deloitte reported that Cau, which is made up of 22 UK outlets, will close immediately while Gaucho, which is the more upmarket restaurant brand in the group, will continue to trade while the administrators look for a buyer.

The 540 people employed by Cau will now lose their jobs while the remaining 765 employees who work across the Gaucho outlets and the group’s head office will also risk losing their jobs if a buyer cannot be found.

The closure is part of a recent trend of restaurant chains shutting outlets, including Prezzo, Byron, and Jamie’s Italian. While the UK economy was boosted overall, the World Cup and accompanying hot weather saw more people choosing to eat in pubs or at home, leading the restaurant industry to suffer.

More general issues like rising business rates, increasing food prices, and salary increase stagnation are also contributing to a decline in the restaurant sector’s success.

The Gaucho group was bought by private equity firm Equistone in January 2016, who said that it suggested a funded rescue plan to the restaurant’s lenders.

Gaucho had considered a number of ways to restructure but it owed a tax bill of over £1m, which was due to to be paid last Friday. The group also owe its banks £50m.

Right before it collapsed, Gaucho filed a notice of intent to appoint Deloitte as its administrator, which means the company gets ten days of protection from creditors, but it failed to form a plan and so fell into administration in the subsequent days.

The accountancy giant is also administrating Poundworld’s collapse, who have confirmed that all shops will be closed by 10 August and almost 1,800 jobs will be lost.

 

 

 

 

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