Major restaurant chain to close ONLY Scottish branch
SHUTTERS DOWN Major restaurant chain to close ONLY Scottish branch
A POPULAR restaurant chain has revealed it's closing six of its locations across the UK - including its only Scottish branch.
Italian chain Gusto said yesterday it would have to close its "economically unviable" restaurants as part of a deal to save the brand.
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Visitors enjoying a meal outside Gusto on George Street, Edinburgh
Credit: Alamy
It is being taken over by private equity investment firm Cherry Equity Partners through a pre-pack administration process.
This is an insolvency process for a business to sell its assets before appointing administrators.
Gusto has now announced which of its 13 sites are set to shut for good.
This includes the Italian restaurant's branch on Edinburgh's George Street.
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Other branches pulling the shutters down are:
Alderley Edge
Cookridge
Edinburgh
Heswall
Leeds
Newcastle
The sites remaining open are:
Liverpool (Albert Dock)
Birmingham
Cheadle
Knutsford
Manchester
Nottingham
Oxford
The closures mean 190 jobs will be lost but a further 300 will be saved.
Paul Moran, chief executive of Gusto Restaurants, said yesterday: "We are profoundly sorry to see six of our restaurants close and are tremendously grateful for the support of our staff and our loyal customers at these locations over the years.
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Inside the brand new small plates Italian slap bang in Glasgow's city centre
"This investment marks an important step forward for Gusto, ensuring the future of the business and putting in place a strong and stable platform upon which we can start to grow the business again."
Gusto offers classic Italian meals including pastas and sourdough pizzas.
It also hosts Italian-style bottomless brunches and pizza-making experiences.
What does it mean when a company goes into administration?
ADMINISTRATION is when all control of a company is passed to an appointed to a licensed insolvency practitioner.
It doesn't necessarily mean the end of the business.
Instead, administrators will try to help a company find ways to repay debts or solve its cash flow problems.
Administration can last anywhere from a few weeks to up to a year or more.
But if the administration process can't rescue the company or find a new owner, this can lead to liquidation.
Liquidation is the process of selling all assets and then dissolving the company completely.
Restaurants and pubs have been struggling after a series of challenges in recent years.
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They've cited the pandemic, the cost of living crisis and increasing taxes on businesses for increasing closures and chains collapsing into administration.
One of the latest chains to crash into administration was Busaba Eathai, which was created by the founder of Wagamama.
The Thai chain had operated 16 restaurants at its peak but this was reduced to 12 following a CVA in 2020.
Posh chain Oakman Inns & Restaurants also said it would close six sites and transfer a further 12 as part of its administration.
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It blamed the hangover from the pandemic and elevated interest rates.
Plus, BrewDog announced it would close 10 sites last week - including its flagship branch in Aberdeen.
The pub chain already closed six sites at the start of the year following a £63million loss.
What is happening to the hospitality industry?
By Laura McGuire, consumer reporter
MANY Food and drink chains have been struggling in recently as the cost of living has led to fewer people spending on eating out.
Businesses had been struggling to bounce back after the pandemic, only to be hit with soaring energy bills and inflation.
Multiple chains have been affected, resulting in big-name brands like Wetherspoons and Frankie & Benny's closing branches.
Some chains have not survived. Byron Burger fell into administration last year, with owners saying it would result in the loss of over 200 jobs.
Pizza giant Papa Johns is shutting down 43 of its stores soon.
Tasty, the owner of Wildwood, said it will shut sites as part of major restructuring plans
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Gusto serves up a selection of Italian favourites including PIzza and Pasta
Credit: gustorestaurants / Instagram
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