New investor rescues North West Italian restaurant chain Gusto but deal will see one of its two Merseyside venues close. Tony McDonough reports

A pre-pack administration deal will see Italian restaurant chain Gusto continue to trade but one of its two Merseyside restaurants will close as part of the deal.

On Tuesday, Knutsford-based Gusto published a Notification of Intent to appoint an administrator. And in a so-called pre-pack deal, Cherry Equity Partners has agreed to buy the business, saving 300 of the 500 jobs.

However, while the agreement means Gusto’s restaurant in Royal Albert Dock Liverpool will remain open, its other Merseyside venue at Heswall in Wirral will close. The deal was arranged by insolvency specialist Interpath Advisory.

In a statement, Gusto Restaurants chief executive Paul Moran said: “This investment marks an important step forward for Gusto, ensuring the future of the business and putting in place a strong and stable platform upon which we can start to grow the business again.”

Originally founded in 2005, Gusto underwent a management buyout in 2014, supported by Palatine and the chain grew from nine restaurants to 13.

Similar to the rest of the hospitality sector Gusto was hit by the effects of the pandemic and in September 2020 Gusto completed a CVA (Company Voluntary Arrangement) which secured the future of the business.

However, the hospitality sector has continued to suffer with rising costs and weaker consumer spending. Gusto’s most recent annual account revealed pre-tax losses of more than £3.7m despite an increase in revenues to almost £27m.

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Six restaurants will close in this latest deal. They are Heswall, Alderley Edge, Cookridge, Edinburgh, Leeds and Newcastle. Sites in Liverpool (Royal Albert Dock), Birmingham, Cheadle, Knutsford, Manchester, Nottingham and Oxford will remain open.

Cherry Equity Partners is London-based. chairman and founding partner Jamie Barber said: “Gusto is a well loved brand with a great heritage, and we’re looking forward to working with Paul and the team to invest and grow the business.”