1,500 jobs at risk as Gaucho steakhouse group collapses

Irving Hamilton
July 19, 2018

A number of jobs at restaurants owned by the company are also at risk across Scotland and UK.

In total, 16 Gaucho restaurants are at risk but are seen as "viable business" from the administration.

Gaucho, which employs 1500 people, has filed a notice of intention to appoint Deloitte as its administrator.

Under the management team's proposals, the Gaucho chain would have continued to operate while CAU would - if approved by creditors - close through a mechanism called a company voluntary arrangement (CVA).

It was reported owed a seven-figure tax bill to HMRC.

This will give the company 10 days before they must settle with creditors.

It is possible that all of the Gaucho restaurants could be salvaged from administration, with the Cau restaurants closed for good.

But despite receiving bids from "a number of parties", the group's complex legal structure and high levels of debt meant directors could not find an "agreed, solvent solution", a spokesperson said. It's like Armageddon on the high street while the government sits on it's hands and does nothing about it.

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Prezzo, Jamie's Italian and Byron and Carluccio's are among those that have announced plans to close some outlets this year.

Restaurants and retailers are being squeezed amid rising business rates and minimum wage costs as well as a slowdown in consumer spending as inflation, especially on food prices, has outstripped wage rises.

The number of restaurants in the United Kingdom fell for the first time in eight years in the year to the end of March as a private equity-fuelled bubble of expansion came to an end.

Cau is described as an aspirational casual dining chain.

Equistone backed a management buyout of Gaucho in 2005 and the business was sold to private equity firm Phoenix the following year with a return of 2.5 times its original investment.

"Consequently, the directors have today filed in court a notice of intention to appoint an administrator for the business".

Gaucho's owner Equistone acquired a majority stake in the chain for £100m in 2016.

He was replaced in January by Oliver Meakin, former boss of Maplin Electronics - which itself fell in to administration in February.

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