Get the latest hospitality news and inspiration straight to your inbox. Subscribe to our newsletter.

Handmade Burger Co collapse blamed on competition, as creditors owed £3.3m

Written by:
Written by:
Handmade Burger Co collapse blamed on competition, as creditors owed £3.3m

An administrator’s report published this week shows that Handmade Burger Company’s collapse was blamed on increasing competition, hot weather and increased threat of terror attacks.

The firm left unsecured creditors out of pocket to the tune of £3.3m.

In June 2017, Paul Masters, Conrad Beighton and Julien Irving of Leonard Curtis Recovery were appointed joint administrators of the Sargeant Partnership and Hand Made Burger Company.

Nine of the 29 Handmade Burger Company restaurants in operation were immediately shut down and staff made redundant.

Among the creditors left with unpaid bills were Birmingham City Council, owed £381,000, Bank of Scotland, due £492,000, and HMRC, owed £297,000. A range of other local councils were left owed business rates, and several suppliers also founde themselves without the cash they were owed, including Nisbets, which is owed just over £8,500 and Zonal Retail Data Systems, which is due £1,537.

According to the administrators’ report, at the start of 2016 the group was faced with the challenge of competitors entering the market. Throughout 2016 and in to 2017, it opened new restaurants in order to “mitigate the threat of rival restaurant openings.”

However, the new restaurants did not deliver the return expected due to “hot weather” and “the increased terror threat level in the UK.”

This saw the start of Handmade Burger Company’s cash flow problems. Leonard Curtis Business Solutions Group was appointed to help with cash management at this time.

The sale of Handmade Burger Company (and Sargeant Partnership Limited) was concluded on 25 July 2017 to the Burger Chain Limited for £462,700 – including advanced rent payments. Seven offers were received.

The report shows that Handmade Burger Company’s turnover for the year ended 31 December 2015 was £8.8m, compared to £5.4m the year previous. It made an operating profit for the year of £715,685. Draft accounts for the year end 31 December 2016 predicted the company would stay flat at £8.8m turnover.

Handmade Burger Company served over 40 different burgers made in-store with fresh produce sourced from top farmers and producers. The group’s initial strategy was to open new restaurants in the Midlands and the north of England.

A total of 20 Handmade Burger Co restaurants are still trading under their new ownership.

Handmade Burger Co sold out of administration >>

Handmade Burger Co falls into administration >>

Handmade Burger Co set to hit 25 sites >>

Videos from The Caterer archives

Are you looking for a new role? See all the current hospitality vacancies available with The Caterer Jobs

1 comment

Sign in to comment or register new account

Iain McGuigan - a year ago

Increased competition. If you are better than them you will keep your customers. Terror and hot weather - please! These people where allowed to borrow money. Best of luck to the new owners. ... read more ... read less

Start the working day with

The Caterer’s free breakfast briefing email

Sign up now for:

  • The latest exclusives from across the industry
  • Innovations, new openings, business news and practical advice
  • The latest product innovations and supplier offers
Sign up for free