Creditors are scheduled to vote on the proposal on March 21 with at least 75 per cent required to approve it for the CVA to proceed (Photo: Jack Taylor/Getty Images).
Radhakrishna N S
THE BOPARAN Restaurant Group (BRG), owner of Giraffe and Ed’s Easy Diner, said yesterday (4) that it is set to shut 27 restaurants of the two brands putting 340 jobs at risk.
Closures of the restaurants will come across the UK, at sites including Aberdeen, Manchester’s Trafford Centre and London’s Holland Park.
The latest decision made to close almost a third of their 87 restaurants is aimed at protecting the company from further loss.
The two brands will enter a company voluntary arrangement (CVA), the company said, adding that CVA is the only option to protect the chain.
“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,” Will Wright, partner at business consultants KPMG, which will supervise attempts to make a deal, said in a call with creditors.
The move to enter a CVA will be put to a creditor vote, with advisers from KPMG overseeing the insolvency process.
Creditors are scheduled to vote on the proposal on March 21 with at least 75 per cent required to approve it for the CVA to proceed.
BRG is backed by British Indian businessman Ranjit Boparan, who also owns the 2 Sisters Food Group, one of Britain’s biggest food producers, and Harry Ramsden fish and chip shops.
BRG purchased Giraffe from Tesco in 2016 in a deal valued at about £13 million. In the same year, the firm paid almost £10m to acquire 30 Ed’s Easy Diner sites after the business entered into administration.
The companies were then merged into BRG-owned Giraffe Concepts Ltd, which created revenue of £67.1m in 2017 with a loss of £9.9m, according to company figures.
The two brands have 87 restaurants, although none of the possible shut down will affect the 17 outlets operated by franchisees, including those in airports.
The company employs more than 1,300 people.
Tom Crowley, chief executive of BRG, said: “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.
“We have been examining options for the two brands for some time…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.”
Meanwhile, staff at 20 Giraffe and seven Ed’s restaurants have been notified of the start of a consultation process on their jobs.