Italian restaurant chain Gusto is set to be acquired out of pre-pack administration in a deal that will see around half its sites close with nearly 200 job losses.
Cherry Equity Partners, the investment firm led by hospitality veterans Ed Standring and Jamie Barber, is to buy seven of the chain’s 13 restaurants, safeguarding more than 300 jobs.
However, the process will see six restaurants close, resulting in around 190 redundancies.
The majority of sites affected are smaller restaurants in suburban locations, which administrator Interpath Advisory said had become “economically unviable due to continuing cost headwinds affecting the sector”.
Gusto chief executive Paul Moran said: “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.”
Moran said the sale had secured the future of the business and provided a stable platform to grow.
The deal is the third acquisition by Cherry Equity Partners this year following the buyout of Latin American restaurant group Cabana in January and French-themed restaurant chain Bistrot Pierre in March.
Barber said: “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.”
Gusto was founded in 2005 by Jeremy Roberts and the late Tim Bacon of Living Ventures Group.
The restaurant chain secured backing from private equity firm Palatine in 2014 with millions pumped into its growth plans in the following years.
However, the business entered a company voluntary arrangement during the pandemic in 2020. The move secured more than 600 jobs but four sites closed.
At the time the business said the restructuring had left it well-funded and in a strong position to grow.
Gusto also closed its Didsbury restaurant last year after an approach from high street retailer Oliver Bonas to take on the site.
Will Wright, UK chief executive of Interpath Advisory, said: “Although these continue to be challenging times for hospitality operators, we are pleased to advise on this transaction which will safeguard the future of a fantastic brand which has been serving customers across cities and suburbs for over 20 years.”
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Dining and Cooking