George Calombaris’ Made Establishment has been placed in voluntary administration. The hospitality juggernaut called in administrators on Monday 10 February, with its 12 venues closed until further notice.
KordaMentha Restructuring partners Craig Shepard and Leanne Chesser were appointed as administrators to 22 companies in the Made Establishment Group. Frozen yoghurt chain Yo-Chi is unaffected and will continue trading as usual across its four locations.
According to a statement released by KordaMentha, all outstanding wages and superannuation have been paid to employees up to the date of the appointment.
The development comes after the MasterChef Australia judge’s business came under scrutiny for underpayments. Declining trade across the group’s venues since the announcement of an enforceable undertaking with the Fair Work Ombudsman has been blamed for the decision.
Made Establishment was fined $200,000 in 2019 for underpaying staff over $7.8 million, after the business self-reported the underpayment of 162 of its 430 team members in 2017.
The mass underpayments occurred at restaurants including the Press Club, Gazi and Hellenic Republic. However, during investigations, the FWO found staff were also underpaid at Jimmy Grants, with the group ordered to back-pay $16,000 to nine employees.
“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,” said 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.”
Alternative operators will be sought for the venues and the administrators will engage with other stakeholders in order to realise the Group’s assets.
A first creditors meeting is set for Thursday 20 February.
Taking to social media to express his regret and thank his team for working tirelessly through the recent challenges, Calombaris said “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 cutsomers. I am so sorry all our collective efforts have not proved to be enough. I’m gutted that it’s come to this.”
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Made Establishment administration follows on heels of Dinner by Heston closure
It’s the second high-profile collapse to rock the hospitality industry this year, with Crown Melbourne terminating Dinner by Heston’s lease at the start of February. It was initially believed the restaurant, fronted by celebrity chef Heston Blumenthal, would remain open and operational after its owner Tipsy Cake Pty Ltd entered administration on 20 December 2019.
Underpayments again have a hand to play, with administrators BRI Ferrier reporting employees were short-changed $4.47 million.
The FWO is liaising with “the provisional liquidator and other relevant stakeholders in order to assist the employees to recover their entitlements,” said Fair Work Ombudsman Sandra Parker in a statement.