The bitter battle between brick and mortar and online retail looks set to take yet another victim. Steak chain Gaucho is the latest in a long list of casualties from within the retail sector, where many have suffered from diminished consumer spending and the consequences of Brexit uncertainty. Official reports have announced the restaurant’s intention to appoint an administrator, filing a notice of intention this morning.
The lessened demand from within the sector has not only had a financial effect on its businesses but has also chipped away at business confidence. Hoping to avoid the fate of their neighbours, business owners have surrendered to restructuring procedures such as CVAs and early insolvency proceedings to reduce the overall damage. While Gaucho is struggling to remain profitable, there are other options available for retailers; other than insolvency. They just have to be made aware of them.
At the Credit Protection Association, many of our Members are from within the retail sector and have communicated to us their plight. Some of our Members have teetered on the edge of insolvency, while others have jumped ship at the mere hint of trouble. In both cases, we have dragged them back towards the confines of business prosperity. Our debt recovery services have freed up cash flow, while our credit management products have protected it.
“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.