Gaucho shows first signs of recovery since administration with 8% year on year covers rise in November, further strengthens leadership team
7 December 2018
Steak brand Gaucho has shown its first signs of recovery since exiting administration with an 8% year-on-year rise in covers during November. It comes as the company said cover numbers had been minus 7% in the year to date on a like-for-like basis. Martin Williams, M Restaurants founder and a former managing director of Gaucho, was brought in to lead the brand as it exited administration in October after its acquisition by Lomo Bidco, an entity owned by Investec Bank and SC Lowy. He immediately brought in a new menu featuring “classic” and “nuevo” sections that offer a preview of how the management team plans to develop the business during 2019 as well as cut prices. It appears the moves are beginning to pay dividends. Williams said: “We are delighted to see nearly 80,000 diners returned to Gaucho last month to try the new, higher-quality, lower-priced menus. The feedback from guests has been amazing and we are welcoming back many regulars as well as seeing a new, younger demographic try Gaucho for the first time.” Williams has also strengthened Gaucho’s leadership team by appointing Gemma Meale as HR director and Max Castaldo as executive chef. Meale joins Gaucho from Splendid Hospitality Hotel Group while Castaldo, born in Argentina, was head chef at the Lanesborough Hotel’s Michelin-starred restaurant. Since Williams took on his role he has appointed Ross Butler as managing director, Travis McKechnie as operations director and Jenna Bromage as brand and marketing director. Gaucho entered administration in July after sister brand CAU saw double-digit declines in like-for-like revenues, with “over-expansion, poor site selection and onerous lease arrangements”. However, the Gaucho brand was not immune from the problems. While revenue was up 2.2% in the first six months of 2018 compared with the previous year, wider cost pressures facing the restaurant sector, including an increase in business rates, rising food prices and the introduction of the National Living Wage, meant restaurant Ebitda margin reduced from 28.1% to 21.4%. All 22 branches of CAU were closed to allow the group to focus on selling the Gaucho chain.