Restaurant chain Gaucho, and its sister Cau, collapsed into administration this week, after it was steered into a series of financial mis-steaks
Administrators have taken over at Gaucho Group, after the premium steak restaurant made a disastrous expansion into the oversupplied casual dining sector.
Borrowing heavily to beef up returns was the brainchild of under pressure finance director Sir Loin Cut, appointed by private equity owners Porterhouse Partners. Sir Loin believed the chain could expand from 16 Gauchos to support a further 22 Caus. However, critics note that having created the concept of Cau, he struggled to fillet.
Poor site selection meant that rather than perform like they were on the New York Strip, the Cau chain span out of control and was eventually t-boned. This blue the Group’s profits and ultimately led to a collapse.
Herald Business Editor Ian “Beefy” Botham advises that “not everyone can be an allrounder. Whilst it is traditional for cash businesses like restaurants to diversify, normally this is into laundering money for drug gangs and brothels. This allows them to stay afloat even with a lower footfall.”
There are still many, many, Aberdeen Angus Steakhouses open for some reason that cannot, our legal department advise us, in any way connect with Beefy’s remarks, despite finding one full being rather…rare.
Administrators Deloitte have immediately closed the loss making Cau restaurants, but remain confident that a buyer can be found for the rump of the business. Fingers crossed that they pull this business back from the brink, we will be the first to say Well Done!