1,500 jobs at risk as restaurant group faces collapse
The Gaucho group of steak restaurants - which is owned by the private equity firm Equistone - has announced that it is on the brink of collapse as it prepares to call in administrators.
For weeks they've been in talks trying to find potential new investors, but a combination of high debts (it has been reported that the firm owes £50m to banks and faces a seven-figure tax bill) and a complex legal structure seem to have prevented a much needed rescue deal.
Up to 1,500 jobs are at risk across the restaurant’s sixteen sites, as well as its sister chain, CAU, which has twenty-two sites across the UK including restaurants in Didsbury, Wilmslow and MediaCity.
The 'ongoing underperformance' of the CAU chain was cited as one of the reasons for the group’s financial troubles. Over-expansion, poor location decisions and tricky rent arrangements have also contributed to the company’s woes.
Under the management team's proposals, it might still be possible for Gaucho to emerge as a 'viable business' from the administration, although the loss-making CAU is likely to close.
Zeev Godik, who was the company’s original founder, left the company a few months ago after 41 years.
The firm’s official statement reads, "until such time as the administrator has been appointed and agreed plans with management, it is business as usual".
The first Gaucho restaurant opened in Amsterdam in 1976, with the first UK branch opening in London in 1994. The Manchester branch opened on St Mary's Street in 2001.