Rumours are swirling that a few of Australia’s best-loved restaurant chains might be on the chopping block as a part of main cost-cutting measures.
It’s understood that Quadrant Personal Fairness’s Pacific Hunter hospitality group is at present investigating loss-making leases at Pacific Ideas.
Pacific Ideas is the arm of the agency behind hit eateries together with Mexican-themed El Camino Cantina, Fratelli Contemporary and bier corridor favorite Munich Brauhaus, in addition to The Bavarian, Bar Patron and The Argyle.
There are 12 El Camino Cantina eating places unfold throughout the nation, and 5 Fratelli Contemporary branches.
It isn’t but recognized what number of eateries might shut on account of the portfolio assessment, though it’s clear that the corporate is forging forward with plans to close websites which can be loss-making.
It’s hoped that affected landlord companions will work with the agency to transition out of leases and areas which can be not viable.
Pacific Hunter Group, beforehand generally known as Rockpool Eating Group, additionally runs up-market eating places Rockpool Bar & Grill, Spice Temple and Sake, and has been hit exhausting by the Covid pandemic, shedding greater than $75 million for the yr to June 30.
It misplaced greater than $87 million within the final monetary yr, and nearly $80 million in 2020.
Within the firm’s most up-to-date monetary report lodged with the Australian Securities and Investments Fee (ASIC), auditor KPMG revealed that: “The situations disclosed … point out {that a} materials uncertainty exists that will solid important doubt on the corporate’s skill to proceed as a going concern and, subsequently, whether or not it is going to realise its property and discharge its liabilities within the regular course of enterprise, and on the quantities said within the monetary report”.
Information.com.au contacted Pacific Ideas for remark.
‘Only a matter of time’
It comes simply days after CreditorWatch business information from the newest Enterprise Danger Index revealed the hospitality business was most susceptible to default as value of dwelling pressures start to chew.
Precise insolvency information recorded this month revealed the meals and beverage sector was nonetheless on the highest threat of business insolvency, with 0.97 per cent of companies going into insolvency on a rolling annual foundation in March 2023, adopted by the development business.
In accordance with an evaluation from CreditorWatch chief economist Anneke Thompson, a serious purpose for that is Australia’s value of dwelling disaster, which has effectively and really put the squeeze on family budgets – particularly on the subject of discretionary spending.
“Whereas the meals and beverage sector has at all times been at increased threat of insolvency in response to CreditorWatch information, the development sector rating second does spotlight that the wash on impacts of insolvency are fairly giant,” Ms Thompson famous.
“The large quantity of presidency stimulus showered upon the broader financial system … allowed many companies that weren’t viable to stagger by means of. These companies had been nicknamed ‘zombie companies’ throughout Covid-19, and far increased provide prices, rates of interest, labour prices and lowering demand and authorities incentives at the moment are exposing these firms.
“Total, we count on that the strain on discretionary spending in Australian households is approaching its peak, as a big proportion of mounted fee residence loans transfer to variable fee loans over the subsequent few months.
“Whereas some bigger non-discretionary associated companies will stay comparatively proof against this spending threat, the meals and beverage sector is especially uncovered, and it’s only a matter of time earlier than Australians start to spend much less (per capita) at eating places and cafes than they did in 2022.”
Australia has been rocked by a string of high-profile restaurant closures not too long ago, highlighting the grim development.
Final month, widespread South Australian eatery Seed Clare Valley knowledgeable prospects it had gone below and can be ceasing commerce “efficient instantly”.
It was the same story up north on Queensland’s Gold Coast the place La Diosa Mexicana, situated contained in the busy Circle on Cavill Buying Centre, had no alternative however to abruptly shut its doorways.
One other current sufferer was Caruso’s Italian Restaurant in Gymea in Sydney’s Sutherland Shire, which was crippled past restoration by working prices, closing its doorways earlier this yr.
On town’s Northern Seashores, Manly’s Jellyfish Cafe has additionally suffered the identical destiny, shutting down final month after nearly twenty years of operation.
Additional highlighting the awful situations is a current Finder survey, which discovered 51 per cent of Aussies trying to chop again on spending had been lowering their eating and ingesting out habits, whereas 36 per cent had been limiting how typically they go to occasions resembling to the films, sporting video games and concert events.
Initially printed as ‘Uncovered’: Massively widespread Aussie restaurant chains face closure amid brutal cost-cutting assessment
