Gaucho becomes latest restaurant group to fail as it confirms it has entered administration with 540 jobs axed and many more at risk

  • Gaucho group appoints administrators after failing to agree on a sale
  • The Gaucho chain could still be salvaged from administration if a buyer is found
  • Its Cau chain of restaurants has been axed though with 540 staff redundant 
  • It is thought the firm owes £50m to its banks and faces a seven-figure tax bill

By This Is Money And Daily Mail Reporters

Updated:

Argentine steakhouse chain Gaucho has become the latest restaurant group to fail with 540 jobs axed and many more at risk.

The group, which is comprised of the Gaucho and Cau branded chains, confirmed it has appointed administrators Deloitte after failing to agree a sale of the business.

The Gaucho chain, which has 16 restaurants, could still be salvaged from administration if a buyer is found, although the 22 Cau sites will close for good with its 540 staff therefore redundant.

Argentine steakhouse chain Gaucho has become the latest restaurant group to fail.

Argentine steakhouse chain Gaucho has become the latest restaurant group to fail.

There are 1,305 total employees at the group, comprising the 540 axed Cau staff, 714 at Gaucho restaurants and 51 at its head office.

It is thought the firm owed £50million to its banks and faced a seven-figure tax bill.

The group, which is backed by private equity firm Equistone, becomes the latest high-profile restaurant group to hit troubles, after Prezzo, Jamie's Italian, Byron and Carluccio's all revealed plans to close outlets this year.

A Gaucho spokesman said last night: 'Despite an extensive process which attracted proposals from a number of parties, it is with regret that, due to the complexities of the group's legal structure, ongoing under-performance at Cau and the level of indebtedness, the directors have been unable to find an agreed, solvent solution.' 

Matt Smith, joint administrator, commented: 'Unfortunately the Cau brand has struggled in the oversupplied casual dining sector with rapid over-expansion, poor site selection, onerous lease arrangements and a fundamentally poor guest proposition all being factors in its underperformance.' 

'As such, the decision has been made to close this loss-making part of the group with immediate effect, unfortunately resulting in today's redundancies.'

There are 1,305 total employees at the group- the 540 axed Cau staff, 714 at Gaucho restaurants and 51 at its head office.

There are 1,305 total employees at the group- the 540 axed Cau staff, 714 at Gaucho restaurants and 51 at its head office.

'The Gaucho business on the other hand, which operates in the premium dining market, continues to trade well in its market segment, is profitable and has a strong underlying brand and guest loyalty,' Smith continued. 

'We are taking steps to stabilise the business following our appointment and are now seeking expressions of interest in terms of a sale of the Gaucho business. We appreciate the support of the group's colleagues and management team and other key stakeholders in achieving this aim.' 

A spokesman for Equistone said: 'Equistone has been a supportive majority shareholder to Gaucho Group since its investment in 2016, working closely with the company to address the challenges presented by the adverse trading conditions that have negatively impacted the UK casual dining sector as a whole. 

'Despite Equistone having presented Gaucho’s lenders with, and committed to funding, a business plan that would have maintained the company as a going concern, a notice of intention to appoint administrators was submitted.'

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