Steak restaurant Gaucho is expected to fall into administration as early as today after rescue talks for the chain failed.
The company has filed a notice of intention to appoint an administrator, it confirmed this morning.
“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,” a spokesperson said.
“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.”
Administrators from Deloitte are likely to be appointed, according to Sky News.
This follows a sale process overseen by advisers at KPMG as the company tried to save the struggling Cau brand.
But lenders have been unable to agree on any of the proposals.
Hugh Osmond, the restaurant millionaire who founded Punch Taverns, was touted as one possible buyer. M Restaurants founder Martin Williams and Gaucho’s own founder Zeev Godik were also linked to the bidding process.
The collapse of the chain could put 1,500 jobs at risk. However, it is thought that the core Gaucho business could still continue as a going concern, whereas the Cau brand is likely to close.
Figures from the restaurant industry were quick to lament the collapse of another operator.
M Restaurants founder Martin Williams, who was at one point in discussions about making a bid for the chain, said it was “so sad”.
As previously reported, We M tried to help…. so sad…. Gaucho to file for administration, with 1,500 jobs at risk https://t.co/qUcvMlVXl1— Martin Williams (@thereisoneM) July 18, 2018
Meanwhile Pied a Terre founder David Moore told City A.M.: “Gaucho like many other restaurants across the UK have been in the red due to soaring cost of business rates and weaker consumer spending following Brexit. It’s like Armageddon on the high street while the government sits on it’s hands and does nothing about it. So many chains and small businesses in the UK are in financial distress and could easily face a similar fate to Gaucho if things don’t change quickly.”
Read more: Gaucho’s CEO just stepped down a week after the chairman was replaced
It has been an eventful year for Gaucho, which said goodbye to its founder after four decades in November last year. His departure sparked rumours that he had been pushed out after a new management team was put in place.
His replacement as chief executive was then appointed in the form of Maplin Electronics boss Oliver Meakin, who left his former company about a month before it collapsed into administration.
Read more: Number of CVAs rockets by 143 per cent over last six months