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Giraffe and Ed’s to close 27 sites as owner brands CVA ‘the only option’ to protect business

Ed’s Easy Diner

Boparan Restaurant Group (BRG) said today that it plans to enter a company voluntary arrangement (CVA), which will lead to 27 store closures across its Giraffe and Ed’s Easy Diner sites.

It has been reported that more than 300 jobs are at risk, with BRG starting the consultation process with staff at 20 Giraffe sites and seven Ed’s locations.

The closures will come across the UK, including Aberdeen, Manchester and London.

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BRG recently hired KPMG to carry out a review of the business and it has been retained to advise on the CVA.

Tom Crowley, CEO of BRG, claims the business has no alternative but to close stores if it is to continue trading. As well as the 27 closures, it is seeking rent reductions on 13 others.

“We have been examining options for the two brands for some time and the CVA is the only option to protect the company. The combination of increasing costs and over-supply of restaurants in the sector and a softening of consumer demand have all contributed to the challenges both these brands face,” he said.

Giraffe and Ed’s Easy Diner together run nearly 90 restaurants in the UK. 17 are run by franchisees, including those in airports, but they remain unaffected by the cuts.

Creditors will vote on the proposals on Thursday 21 March, with the company requiring at least 75% to agree to the plans.

Will Wright, restructuring partner at KPMG, said: “This CVA seeks to address the cost of the company’s leasehold obligations across a number of unprofitable sites, and if successful, will put the business on a surer financial footing. Importantly, it constitutes one element of a wider financial and operational turnaround plan which, subject to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder.”

BRG has operated Giraffe since 2016, when it bought the chain from Tesco. It acquired 30 Ed’s Easy Diner sites the same year after the business fell into administration.

https://www.foodserviceequipmentjournal.com/restaurant-insolvencies-cost-british-taxpayers-300m-in-employee-payments/

 

Tags : Boparan Restaurant GroupcvaEd’s Easy DinerGiraffe
Andrew Seymour

The author Andrew Seymour

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