Luke Johnson’s restaurant group, Giraffe, has agreed to purchase eleven outlets from Clapham House-owned burger chain Tootsies, which went into administration yesterday.
The pre-pack deal was announced as AIM-quoted Clapham House, owner of the Gourmet Burger Kitchen and Real Greek chains, pulled the plug on the loss-making business in order to focus on its profitable brands.
Giraffe, which is backed by private equity group 3i as well as Luke Johnson’s venture capital firm Risk Capital Partners, will acquire 11 of the 21 Tootsies outlets in London and the South East in a £2.5m deal.
Giraffe, which will have 36 restaurants on completion of the deal, will temporarily keep the restaurants trading as Tootsies, although they will eventually be branded as Giraffe outlets.
Luke Johnson said: “This is a deal that will transform Giraffe and it shows how ambitious we are for the business.”
Tootsies’ administrator, BDO, is in talks with several other parties about the remaining 10 outlets.
Clapham House, which is led by run by executive chairman David Page, decided to withdraw support for Tootsies after a number of attempts to reinvigorate or sell the brand failed.
In July, Clapham House wrote down the value of the business by £24.2m and a new menu failed to stem a declining performance. Like-for-like sales at Tootsies reportedly fell by almost 20% in recent weeks.
Clapham House purchased the brand three years ago for £26m when it had 32 restaurants, some of which have been converted into Gourmet Burger Kitchen outlets.
Page said: “We have taken these steps with great regret. We believe that this is the best course of action to protect shareholder value whilst minimising job losses."
Johnson and Page previously worked together on the expansion of Pizza Express, which they floated in 1993 alongside Hugh Osmond.
© Crimson Business Ltd. 2009