Customers return to Famous Brands’ GBK

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Customers return to Famous Brands’ GBK

Published Date: 2020-08-14 | Source: Stephen Gunnion | Author: Stephen Gunnion

Customers return to Famous Brands’ GBK

The restaurant group says the board of GBK is reviewing options available to the business after it cut off further financial assistance.

Famous Brands says customers are returning to its Gourmet Burger Kitchen (GBK) restaurants in the UK as lockdown restrictions continue to ease. The restaurant group says GBK also managed to meet July's target of generating 49% of the revenue earned in the same month last year, despite limited service and trading restrictions.

Earlier this year, Famous Brands cut funding to GBK as it continued to gobble up cash due to the weak consumer environment in the UK. All GBK's restaurants in the UK and Ireland were closed during the initial stages of the lockdown, with 37 of the 62 UK stores now open and offering full service. Of the five stores in Ireland, one is open for full service and the other four remain closed.

Famous Brands said in light of its decision to not provide any further financial assistance, GBK's board was reviewing its options.

Famous Brands bought GBK for about R2.3 billion in 2016 to further diversify its earnings geographically but the Brexit vote and ensuing weak economic conditions in the UK negatively impacted trading at the chain. After impairing its investment twice - by R400 million in 2018 and a further R874 million in its 2019 financial year - it said in April it may still impair the remaining value of its investment.

Famous Brands' shares rose 1.6% to R46.73 yesterday.





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