Creditors approve restaurant closures putting hundreds of jobs at risk
Plans to close 27 Giraffe and Ed’s Easy Diner restaurants have been approved by creditors, putting hundreds of jobs at risk.
The brands will enter a company voluntary arrangement (CVA) and close almost a third of their 87 restaurants.
Giraffe and Ed’s Easy Diner are owned by Boparan Restaurant Group (BRG), the Birmingham-based company which operates a number of casual dining brands including Harry Ramsden’s, and are part of the same Boparan family of business that includes 2 Sisters Food Group.
It first put forward the plan earlier this month, and it is understood that around 340 of the 1,300-strong workforce could lose their jobs.
BRG said sales had improved since the chains were acquired in 2016, but several sites remained unprofitable.
The deal will also give the chains rent reductions at 13 sites.
The 17 sites which are operated as franchises are unaffected by the CVA.
The two brands are operated by a Boparan group company, Giraffe Concepts. Its most recent accounts, published in October for 2017, showed a pre-tax loss of £9.9m on sales of £67.1m.
Ed’s Easy Diner has regional sites in Birmingham at Grand Central, Arena Birmingham and in Selfridges, while Giraffe operates in Grand Central and Birmingham Airport.
Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: “This is a critical step forward for the business, allowing Giraffe Concepts to complete its financial restructuring plan and embark on a comprehensive operational transformation programme.”
Paul Berkovi, director at KPMG, added: “Today’s vote saw a significant majority of all voting creditors choosing to approve the CVA, surpassing the 75% total required in order to pass the resolution.”
The casual dining sector has been under pressure for the last couple of years through a combination of weaker consumer confidence, rising costs, and the impact of fast expansion of the sector.
Burger brands Byron, Gourmet Burger Kitchen and Handmade Burger Company have all shuts sites or restructured, while Giraffe’s competitor chains including Jamie’s Italian, Prezzo and Strada have also downsized.