(Adds detail, context and background)
JOHANNESBURG, Oct 14 (Reuters) - British-based restaurant
chain Gourmet Burger Kitchen (GBK) has entered administration,
South African owner Famous Brands said on Wednesday,
becoming the latest victim of brutal trading conditions in the
face of COVID-19.
Administrators have been appointed and have assumed control
of GBK and its UK subsidiaries, Famous Brands said in a
statement, adding that options could include a sale of the
business and its assets.
Shares in Famous Brands were down 2.5% at 1154 GMT.
Famous Brands bought GBK in 2016 but its contribution to
group profitability has taken longer than the company had
expected, hampered by pressure on consumer spending as well as
high property rates, increased input costs and a highly
competitive restaurant market.
The COVID-19 pandemic has proved a challenge too far for the
burger chain with 67 restaurants across the United Kingdom and
Famous Brands said in April that it would not provide
further financial support for GBK because of uncertainty over
when restaurants would reopen after the UK coronavirus lockdown
imposed the previous month.
GBK reopened 37 of its 62 UK stores for full service by Aug.
13 and one of its five stores in Ireland.
Its UK sales for the 26 weeks to Aug. 27 were down a little
more than 66% in sterling terms, Famous Brands said in a
September trading statement.
(Reporting by Nqobile Dludla
Editing by David Goodman)