Belgian restaurant chain Lunch Garden has declared bankruptcy. 42 of its 62 locations will remain open under new ownership.
The Antwerp-based investment firm CIM Capital has announced that it will acquire the business, ensuring continued operations at the affected sites, as reported by the Belga News Agency.
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The announcement was made to trade unions during an extraordinary works council meeting at Lunch Garden’s headquarters in Evere, in Belgium’s Brussels Capital Region.
The company stated that while the decision was “extremely difficult,” it was crucial for securing the long-term viability of the business and safeguarding as many jobs as possible.
The move comes after Lunch Garden faced considerable financial challenges, including the impact of Covid-19 lockdowns, rising operational costs due to inflation, and underperforming locations affecting overall results.
Despite a positive trend in revenue and operational profits over the past two years, the improvements were not enough to fund necessary investments.
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By GlobalDataCIM Capital, known for its expertise in restructuring struggling businesses, plans to revitalise Lunch Garden by focusing on its most profitable locations and modernising the chain to meet current market demands.
In 2023, Lima Bidco, Lunch Garden’s Luxembourg-based parent company, reported substantial debts and a negative equity position.
The Belgian operations recorded revenue of €94.5m ($97.03m) but faced an operating loss of €5.4m ($5.54m).
The company had already attempted cost-cutting measures, reducing its workforce from 1,100 employees in 2020 to 800 by the end of 2023, yet financial stability remained elusive.
CIM Capital aims to enhance Lunch Garden’s brand perception and customer base.
The chain has struggled to attract younger customers with its traditional Belgian offerings such as vol-au-vents and meatballs in tomato sauce.
Immediate efforts will concentrate on streamlining operations, investing in profitable sites and updating the restaurant concept to appeal to a wider demographic.
The transition is set to occur rapidly, with the restart expected within a few days.
