Tootsies collapses into administration
Struggling restaurant chain Tootsies has collapsed into administration after becoming the latest victim of the recession.
The group called in the administrators today after parent company Clapham House Group withdrew its support and funding.
A sale of Tootsies, which Clapham House bought for £25m in 2006, has long been mooted as a way for the company to reduce its debt and focus resources on developing its successful Gourmet Burger Kitchen (GBK) and Real Greek brands.
"Given the current economic outlook and the prolonged downturn in trading and profitability at the Tootsies business, the Clapham House board believes that there is little prospect of the Tootsies business as a whole generating a profit in the near future," Clapham House said in a statement.
"As a result, and after extensive review, the solvent restructuring of the Tootsies business is not considered to be a viable solution."
Following Tootsies's collapse, administrator BDO agreed a sale of 11 of its 21 outlets to restaurant group Giraffe for a consideration of £2.5m (before costs) via property agent Coffer Corporate Leisure.
The sites, located in London, Norwich, Bury St Edmunds, Weybridge and Portsmouth, will be rebranded over the coming months and increase Giraffe's portfolio to 36 restaurants plus five airport franchises.
Chairman Luke Johnson said: "This is a deal that will transform Giraffe and it shows how ambitious we are for the business."
Clapham House Group in talks to sell Tootsies >>
Restaurant discounts are hurting net margins, warns Clapham House >>
Clapham House remains positive despite profit fall >>
By Kerstin Kühn
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