National chain looking to offload Manchester restaurant records pre-tax loss of £7m
WE'VE all been known to lose a few pennies down the back of the sofa, but spare a thought for Messrs Burger and Lobster who have recorded a pre-tax loss of more than £7m. This leaves the future of the minimal-menu chain in ‘significant doubt’, thanks to a combination of over-ambitious expansion plans, their rigidly fixed price point and the rising price of lobster.
Burger & Lobster, founded in 2011, originally as an off-shoot of the steakhouse restaurant group Goodman, have a total of fourteen UK restaurants, with twelve in London. Significant pre-opening costs involved in funding their ambitious expansion in the UK and an increase in head office costs are also said to have contributed to the poor results.
The restaurant chain negotiated a loan from National Westminster Bank to finance future growth but has been unable to comply with the terms of the debt agreements. Loss-making restaurants have been sold, including their 240-seat Cardiff site, and further overheads have been reduced as a result of a restructuring of head office. The company is currently negotiating revised financial terms and is seeking further investment.
Its 170-cover Manchester site opened in the Victorian Grade II-listed Ship Canal House by King Street in August 2015, but was put up for sale last year. In July, we reported that the group were looking to downsize their huge Manchester venue, with Maisie Denning, the group’s Head of Marketing, telling us they were “looking to either split the existing site in half and work with two concepts, or relocate to a smaller venue.”
It seems the group was hamstrung by their limited menu-that’s-not-a-menu - the irony being that this was introduced to make things easier for the customer. Originally the idea was that for £20, customers could order a whole lobster, 10oz burger or a lobster roll, all with chips and a salad. Last June, the company restructured its pricing policy, resulting in a burger at the more competitive £16, a lobster roll £25, and lobster ranging anywhere in price between £19 for 500g to a whopping £54 a kilo.
A directors’ report reveals that more underperforming sites are up for the chop, but at this point it is not known which ones they might be. The group is keen to find ways to continue trading and are said to have ‘reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future’.