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Roadside caterer Little Chef collapses into administration

03 January 2007 by
Roadside caterer Little Chef collapses into administration

Little Chef has agreed the sale of 196 of its 234 restaurants for between £5m and £10m to venture capital group RCapital after going into administration this afternoon.

A statement by administrator PricewaterhouseCoopers (PWC) said the iconic roadside group had incurred "significant losses" since it was bought by entrepreneurs Simon Heath and Lawrence Wosskow for £52m last October.

Rumours have circulated since late December that it was struggling to meet rent payments after agreeing a £60.3m sale-and-leaseback deal on 65 sites with Israeli property group Arazim to fund a revamp. Some reports suggested it was losing up to £3m per year in sales.

Little Chef co-owner Simon Heath, who will remain with the existing management team, said: "The business has been through incredibly tough times in recent years but one thing we do know from our existing customers is that Little Chef is a much loved brand.

"This is a British icon which has, despite its chequered past, maintained a level of brand integrity. Albeit out of date, it clearly has a future in today's marketplace."

An RCapital spokesman said: "While Little Chef has been through incredibly tough financial times of late, the potential to re-energise the brand and turn the business around is enormous.

"We are restructuring the business and building on the successes by adding to the mix our financial backing and a team of market experts to ensure we get the business back on track and give the customers what they want."

PWC is currently looking for a buyer for the remaining 38 sites but said nobody was currently in the frame.

A PWC spokeswoman said it was still unclear how many of the group's 4,000 jobs would be saved.

Little Chef to make announcement on its future >>

Little Chef in weekend crisis talks >>

BP team to help revive Little Chef? >>

By Tom Bill

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