A popular UK restaurant chain known for its Italian food has revealed plans to shut some of its venues after a change of ownership.
Gusto Italian announced on Wednesday it will close six of its 13 restaurants after being snapped up by a private equity firm.
The chain has been reportedly on the verge of collapse for weeks amid efforts to find a buyer as part of an insolvency agreement.
Most of the Italian restaurant chain, which has sites in locations such as Cheshire and Greater Manchester, has this week been acquired by Cherry Equity Partners, which owns Latin American restaurant concept Cabana.
The transaction is being undertaken via a pre-pack administration process.
A pre-pack administration is an insolvency process for a business to sell its assets before appointing administrators.
As a result of the deal, Gusto Italian restaurants in Alderley Edge, Cookridge, Edinburgh, Heswall, Leeds and Newcastle will be closing.
Closures: Gusto Italian is closing six of its 13 restaurants amid an acquisition deal
The closures are set to result in approximately 190 job losses.
Seven of the chain’s restaurants will remain open.
The location of Gusto Italian chains to remain open are: Liverpool, Birmingham, Cheadle, Knutsford, Manchester, Nottingham and Oxford. Around 300 jobs have been saved.
Founded in Cheshire in 2005 by Jeremy Roberts and the late Tim Bacon as a rebrand of Est Est Est, Gusto Italian was previously been named Italian Restaurant of the Year at the Pizza, Pasta and Italian Food Association’s PAPA Industry Awards.
Paul Moran, chief executive of Gusto Restaurants, said in a statement: ‘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.
‘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.’
Ed Standring, chief executive and operating partner of Cherry Equity Partners, said: ‘This investment marks our third acquisition in six months, and underscores our deep commitment to the UK hospitality sector.
‘This is an industry we’re incredibly passionate about and one we believe is full of opportunity.’
Jamie Barber, chairman and founding partner of Cherry Equity Partners, added: ‘Gusto is a well-loved brand with a great heritage, and we’re looking forward to working with Paul and the team to invest and grow the business.’
The transaction is being led by Will Wright and Rick Harrison from Interpath who are expected to be appointed joint administrators to Gusto Restaurants Limited.
Hospitality woes
The hospitality sector has been battling against surging bills and costs, including higher wages, energy bills and employer national insurance contributions.
Thai restaurant chain Busaba Eathai was forced to draft in administrators last week and Oakman Inns & Restaurants recently said it would close six sites and transfer a further 12 as part of its administration process.
Last week, craft beer firm Brewdog announced plans to close 10 bars across Britain, including its flagship pub in Aberdeen.
The bars earmarked for closure are in Aberdeen, Dundee, Leeds, Brighton, Oxford, Sheffield, York and three in London.
A spokesperson for Brewdog last week said the ‘difficult decision’ had been taken as a result of ‘ongoing industry challenges.’
They added these included ‘rising costs, increased regulation, and economic pressures.’
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