French Duncan appointed liquidators of the Boathouse Hotel and restaurant at Kilsyth
16 October 2018
Accountants and business advisers French Duncan have been appointed the liquidators of Town House restaurants Ltd, which operates under the name of the Boathouse hotel and restaurant in Kilsyth.
The business, which was launched at the Auchinstarry Marina almost ten years ago, has closed with immediate effect resulting in the loss of 36 jobs.
The closure of the Boathouse restaurant and hotel occurs at a time when the casual dining sector in Scotland has never been under greater pressure. The latest official statistics show that 76 restaurants closed in Scotland during the first six months of this year which is three more than for the whole of 2017.
Eileen Blackburn, head of Restructuring and Debt Advisory at French Duncan LLP, explained: “The closure of the Boathouse is indicative of wider financial difficulties facing the casual dining sector which is currently encountering unprecedented issues which are resulting in failure for a growing number of operators.
“Far more restaurants close without entering into a formal insolvency process so the numbers struggling financially on a day to day basis will be much larger than the official numbers indicate. Operating a restaurant profitably has always been difficult but there are growing complications from rising rents and rates, increased staff costs, and higher supply costs.”
The restaurant sector has been experiencing a very difficult time with many high-profile restaurant chains announcing partial or substantial closures this year including Gaucho, burger group Byron, Jamie’s Italian restaurants, the Strada Italian restaurant chain, Carluccio’s, and Prezzo.
Ms Blackburn continued: “The sector has an issue with over-capacity, with rising costs and issues over some operators using outmoded business models. Many restaurants compensate for lower customer numbers by using discount vouchers which can work in the short term but may, ultimately, lead to a vicious circle of voucher dependence, lower income, and reduced profitability and, ultimately, closure.
“The growth of delivery services has opened an enormous new market from food outlets that never delivered before giving consumers the option of saving some money by eating takeaways at home. Equally the pub food market continues to grow both in the form of successful chains and individual outlets allowing for an evening out at less cost than most restaurants can manage.
“Nobody operates a business with the expectation that it will fail but the restaurant sector has become an increasingly difficult environment in which to thrive. Restaurant owners need to be acutely aware of the issues involved in running a financially tight ship in this sector. It is all too easy to let costs over-run, over staff your business, and not account for inevitable downturns in the market in the short and long term. Cash flow is king for this sector and understanding where your business is at any one time is essential to survival. Realising there is an issue is the first step in responding to it.”