FOOD RETAIL
How Famous Brands’ UK burger business went from bad to worse
The value of Gourmet Burger Kitchen has been reduced by R874m, following a R373m write-down five months ago
Famous Brands, owner of Steers and Wimpy, has now reduced the value of its premium burger chain in the UK by more than half since it bought the business two years ago. The offshore acquisition has blighted the company’s otherwise solid track record, analysts say, comparing it to Woolworths’ overzealous move to buy Australian department store chain David Jones in 2014. Famous Brands, which bought Gourmet Burger Kitchen (GBK) for £120m (R2.3bn) in 2016, said on Monday it had written down the value of that business by R874m. This follows a R373m impairment, with provisions for store closures, just five months ago. GBK has been struggling due to lower consumer confidence amid Brexit talks, the rise of online food delivery and intense competition in the premium burger segment. The group’s shares fell 8.6% to R93.20 following Monday’s announcement. They have fallen 46% since reaching an all-time high of R172.80 a month after the GBK deal was unveiled in September 2016.
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