Hundreds of jobs are at risk following an announcement by the Boparan Restaurant Group that Giraffe and Ed’s Easy Diner will shut 27 of their combined 87 sites as part of a strategy to reduce company debts.
The “world kitchen” Giraffe and retro-style Ed’s Easy Diner will shut 27 of their 87 combined sites as part of a Company Voluntary Arrangement, a strategy businesses implement to reduce debts by paying creditors over a fixed period.
The Boparan Restaurant Group acquired Giraffe from Tesco in 2016, in two deals valued at around £23 million.
BRG later combined Giraffe with Ed’s Easy Diner, the two brands generating a combined annual turnover of £67.1 million. In the same period, underlying losses came to £1.6 million.
Chief executive of BRG, Tom Crowley, said: “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 oversupply of restaurants in the sector, and a softening of consumer demand, have all contributed to the challenges both these brands face.”
The process will be handled by KPMG, an audit, tax and advisory services, with the proposal to be put to a creditor vote in March.
The company’s other brands, which include restaurant chains Slim Chickens and Harry Ramsden, and grocery brands Goodfella’s pizza and Fox’s biscuits, are believed to be unaffected by the decision.
BRG will join a number of well-known companies in the restaurant industry, including chains Byron Burger, Carluccio’s and Prezzo, who entered into CVAs last year.