George Calombaris' restaurant group enters voluntary administration

11 February 2020, Written by David Simmons

George Calombaris' restaurant group enters voluntary administration

UPDATE: Administrators hope to sell-off the 12 failed restaurants before the end of this week, saying "time is of the essence". KordaMentha says 10 to 15 possible buyers have already shown interest since their appointment.

Scandals surrounding celebrity chef George Calombaris have taken their toll on his restaurant empire, which is now under voluntary administration with 400 employees affected. 

Voluntary administrators KordaMentha have been appointed for his business MAdE Establishment Group, with the exception of his frozen yoghurt business Yo-Chi.

Established in 2007, MAdE comprises 22 companies including 12 restaurants and food venues in Melbourne.

Employees have all been paid outstanding wages and their superannuation is up-to-date, but they will be out of work once the restaurants shut down for good.

The appointment of administrators Craig Shepard and Leanne Chesser follows the widely publicised underpayments scandal at Calombaris operated Press Club, Gazi and Hellenic Republic restaurants.

Fair Work inspectors discovered that Calombaris had failed to pay workers around $7.8 million in wage entitlements in 2019. The scandal also resulted in Calombaris leaving the popular Master Chef program on Network 10.

Shepard says Calombaris was unsuccessful in his attempt to relaunch the restaurants in the wake of the underpayments issue. 

"A major rebranding of a number of high-profile venues including Hellenic Hotel Williamstown (relaunched as Hotel Argentina), Hellenic Republic Brunswick (recently re-opened as Crofter Dining Room) and The Press Club (relaunched as Elektra) was unable to turn the business around, despite strong reviews," says Shepard.

"Other factors were generally difficult trading conditions in the hospitality industry in recent years due to the expansion of the on-demand economy via services such as UberEats and Deliveroo, increasing costs, fierce industry competition and changes in consumer tastes to favour cheaper mid-tier dining options."

In a statement posted to Instagram Calombaris says he is "gutted" that the business has collapsed, noting that these past few months have been "the most challenging [he] has ever faced".

Read Calombaris' full statement below:

"My dream for MADE Establishment 13 years ago was a vision to create something truly special for all those who entered our restaurant - elite original cuisine, love and care, created alongside a family valued team of whom I have always been incredibly proud.

"Although we have all continued to work tirelessly and overcome the many challenges we have recently experienced, it is with deep sadness and regret that today MADE Establishment has been placed into voluntary administration.

"To all of my team, I truly regret it has come to this. I thank you from the bottom of my heart for your loyalty and friendship.

"On a personal note, the last few months have been the most challenging I have ever faced. At this time, while personally devastated, I remain thankful to my family, friends, the MADE team, our loyal and regular customers. I am so sorry all our collective efforts have not proved to be enough. I'm gutted that it's come to this.

"The one thing I would ask is that you please respect how difficult this is for my team, my family, myself and those close to us and simply allow us to go through this process which is already deeply affecting us all."

A first meeting of creditors will be held next Thursday 20 February.

Calombaris is not the only celebrity chef currently boiling away - British chef Heston Blumenthal has recently been embroiled in an underpayments scandal at his Melbourne-based Crown Casino restaurant Dinner by Heston.

The restaurant will not open beyond this Friday night after it fell into liquidation, with the company owing over $4 million to employees. It is expected the company will be put into liquidation by the Federal Court sometime this week.

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Business News Australia

 
Author: David Simmons

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