Beloved UK restaurant chain with 7 locations founded by Wagamama’s owner collapses into administration
A BELOVED restaurant chain, which was created by the founder of Wagamama, has collapsed into administration.
Busaba Eathai drafted in administrators from Leonard Curtis on July 16, according to filings on Companies House.
At its peak, the Thai chain operated 16 restaurants, but this was reduced to 12 following a CVA in 2020.
It currently operates seven locations, with six in London and one in Lakeside shopping centre in Essex.
These sites are still operating as usual.
Over the last few years, the chain launched several new projects to try and cope in the tumultuous restaurant industry post-pandemic.
In 2022, they opened an izakaya-inspired bar called Ajia, as well as a new restaurant in Oxford.
These didn’t last long, closing down in 2023 amidst falling profits.
Last year, the restaurant chain announced an overhaul of their London Westfield Stratford site, as well as a new trial restaurant.
They hoped to appeal to younger audiences with a range of small plates and an emphasis on drinks.
Busaba’s menu includes a range of curries, noodle dishes and grills.
The chain was created by Alan Yau, the founder of Wagamama in 1999.
The eatery is now headed by chief executive Winston Matthews.
It comes amid a tricky time for the UK pub and restaurant scene.
Just yesterday, Oakman Inns & Restaurants said it would close six sites and transfer a further 12 as part of its administration.
The posh chain, first founded in 2007 by entrepreneur Peter Borg-Neal, has blamed the hangover from the pandemic and elevated interest rates for its troubles.
Elsewhere, BrewDog announced it would shutter 10 sites this weekend, including its flagship branch in Aberdeen.
Staff were left outraged, claiming they were given just three days’ notice about the upcoming closures.
What does going into administration mean?
WHEN a company enters into administration, all control is passed to an appointed administrator.
The administrator has to leverage the company’s assets and business to repay creditors any outstanding debts.
Once a company enters administration, a “moratorium” is put in place which means no legal action can be taken against it.
Administrators write to your creditors and Companies House to say they’ve been appointed.
They try to stop the company from being liquidated (closing down), and if it can’t it pays as much of a company’s debts from its remaining assets.
The administrator has eight weeks to write a statement explaining what they plan to do to move the business forward.
This must be sent to creditors, employees and Companies House and invite them to approve or amend the plans at a meeting.
A Notice of Intention is used to inform concerning parties that a company intends to enter administration.
It is a physical document which is submitted to court, usually by directors aiming to prevent a company from being liquidated.
Like with a standard administration process, a Notice of Intention stops creditors from taking out any legal action over a company while they try and rectify the business.
Brewdog already closed six sites at the start of the year following a £63million loss.
Tough times for UK hospitality
Many of Britain’s hospitality chains still reeling from the impact of the pandemic and cost of living crisis which followed shortly after.
The hike in costs to every day goods has meant that punters have less money to part with at the till.
Earlier this month, it was discovered The Coconut Tree would be wound up after defaulting on its Company Voluntary Agreement (CVA),
The Sri Lankan restaurant group entered into the agreement last July, according to a report in Restaurant Online, with the group required to initially repay £27,000 a month for the first three months.
Elsewhere, Officina 00, a popular pasta join, closed three locations across Covent Garden, Fitzrovia and Old Street.
The Cosy Club at Ipswich’s Buttermarket Shopping Centre has announced it made the “very difficult decision” to close doors on May 31.
What is happening to the hospitality industry?
FIVE years on from the pandemic and UK hospitality groups are still picking up the pieces.
While restrictions and social distancing are well in the past, businesses are now dealing with a plethora of other issues such as hikes to National Insurance and customers having little money to part with at the till.
Brewdog will close 10 pubs this weekend, including its flagship site in Aberdeen and a branch.
Elsewhere, French-inspired brasserie Côte is being auctioned off by private equity firm Partners Group.
The company is working together with Interpath Advisory to seek out fresh investors for the embattled restaurant chain, Sky News first reported.
The chain has more than 70 sites across the UK, down from close to 100 shortly before it collapsed into insolvency five years ago.About 60 of its remaining sites are thought to be profitable – meaning there is a risk of more closures.