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Gaucho sacrifices “struggling” sister chain in final bid to find a buyer

Published:  20 July, 2018

Gaucho has announced it is closing all of its Cau sites in order to focus on stabilising the Argentinian wine and steak restaurant.

The loss to the hospitality sector is 22 restaurants and some 500 jobs.

The news comes after Gaucho, a favourite of many in the industry, known for championing Argentinan wine in a smart and stylish setting, announced it was appointing administrators yesterday.

Accountancy firm Deloitte, which is handling the administrative process, set out Cau’s failing in a new statement.

“Unfortunately the Cau brand has struggled in the oversupplied casual dining sector with rapid overexpansion, poor site selection, onerous lease arrangements and a fundamentally poor guest proposition,” Matt Smith joint administrator, said.

“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.”

Smith confirmed moves were being made to now find a buyer for the Gaucho chain and the 765 members of staff still employed across Gaucho’s 17 restaurants and head office.

The Gaucho chain “continues to trade well in its market segment, is profitable and has a strong underlying brand and guest loyalty”, Smith added.

Gaucho is the latest in a number of high street dining chains to run into trouble amid a squeeze on consumer spending and overexpansion fuelled by private equity investors.

Liran Mayost, deputy CEO of customer engagement platform Como, placed the blamed on the inaction of many restaurant groups to adapt and match digital efficiencies offered online.

“It’s clear that those failing to evolve in the digital age are getting left behind, and are bound to collapse at some point in the near future if they don’t act quickly,” he said.

“We’ve seen this with the likes of Prezzo, Jamie’s Italian, Byron Burger and now Gaucho’s 39 restaurants. On the other hand, we’re also seeing restaurants / chains including Burger King, Creams, Turtle Bay, The Diner, Benihana, and Natural Kitchen who are getting smarter about their digital point of sale offerings to increase footfall and loyalty.”