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Gaucho on brink of collapse

Published:  18 July, 2018

Fine wine and steak restaurant Gaucho has become the latest casualty of the high street after administrators were appointed to deal with the ailing business.

About 1,500 jobs are at risk after high debt levels have pushed the chain, which champions Argentinan wine and gastronomy, towards insolvency.

While Gaucho is believed to have been performing in line with expectations, the "ongoing underperformance" of sister restaurant Cau has been under threat since May.

Since then, advisors have been in talks with buyers to save the 39 restaurants in the Gaucho and Cau chains.

However, none of the potential buyers, believed to be Osmond Capital, Core Capital, Limerston Capital and the current owner, Equistone, were willing to pay the £50m owed by Gaucho to its banks.

“Despite an extensive options 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 underperformance at CAU and the level of indebtedness, the directors have been unable to find an agreed, solvent solution,” the group said in statement.

"Consequently, the directors have today filed in court a notice of intention to appoint an administrator for the business. Until such time as the administrator has been appointed and agreed plans with management, it is business as usual."

Gaucho, which sits at the aspirational end of the casual dining segment, now sits alongside other high street chains Prezzo, Jamie's Italian, Byron and Carluccio's which have also struggled this year.

In January, Byron Burger announced 20 of its sites were at risk of closure, while Prezzo followed suit with 94 closures in March.

Casual dining has been put under enormous pressure recently from changing consumer habits, high overheads and the influence of aggregator delivery services like Deliveroo, which has been accused of forcing restaurants to cannibalise profit leading alcohol sales in order to keep up with demand.