Restaurant chain’s creditors expected to lose £14.6m

The businesses controlling restaurant chain Handmade Burger Co are expected to leave behind debts of £14.6m once adminstrators have completed their work with the collapsed companies.

Two related businesses – The Sargeant Partnership and Hand Made Burger Company – were forced to appoint administrators from Leonard Curtis in July.

The businesses were sold to The Burger Chain for £1.46m, an unrelated business that was set up as a vehicle to buy the assets. The deal saved 530 jobs at 20 restaurants.

The administrators said: “At the start of 2016, the company began to experience challenges with new competitors entering the market, particularly with the opening of rival restaurants in the same locations as the company and large sporting events affecting sales patterns.

“Furthermore the directors were conscious of the uncertainty regarding the UK voting to leave the European Union and the resulting impact this would have on the company’s supply chain, particularly its produce, which was soured from local farmers and producers.”

Handmade Burger Co first launched in 2006 in Birmingham by brothers Matthew, Chris and Richard Sargeant, and grew to 29 restaurants.

Handmade Burger Co at Brindleyplace, Birmingham

The combined companies had a turnover of £26.2m in 2016 but made a pre-tax profit of just £92,000, according to management accounts.

In the first four months of 2017, its losses were nearly £400,000.

Several restaurant openings across the UK, including East Kilbride, Durham and Bournemouth, in late 2016 and early 2017 were designed to fight back against the pressure of competition.

But the new restaurants failed to deliver the expected returns, “with sales targets being affected by hot weather and, more recently, the increased terror threat level in the UK”, the administrators said.

Close