The operator of 17 well-known restaurants and bars has collapsed into receivership.
The Keystone Hospitality Group was founded in 2000 and operates six restaurants under the Jamie’s Italian brand, which was founded by celebrity chef Jamie Oliver. The venues are located in Sydney, Perth, Canberra, Brisbane and Adelaide.
The group also operates Cargo Bar and Bungalow 8 in Sydney, Chophouse in Sydney and Perth, and Kinglseys in Brisbane and Woolloomooloo.
Receivers and managers were appointed to the group on Tuesday, with Morgan Kelly and Ryan Eagle of Ferrier Hodgson appointed as external managers.
Ferrier Hodgson said in a statement the appointment was made by a “syndicate of lenders” who were unable to “reach agreement with the [Keystone Group] board on key aspects of the Keystone Groups’ financial structure”.
The venues will continue to trade while the receivers review each venue and prepare for a sales campaign, which Ferrier Hodgson said it expects will commence soon and likely include options for the group to be sold in entirety or for venues to be sold individually.
“Given the current buoyant hospitality market we anticipate a lot of interest in the sale of the venues,” receiver Morgan Kelly said in the same statement.
“The venues in the Keystone Group comprise some of the most iconic and well-known brands in their respective markets.
“The sale of the group represents a unique opportunity for the right operator and is particularly suited to hospitality specialists interested in expansion.”
A spokesperson for the Ferrier Hodgson told SmartCompany the Keystone Group currently employs 1200 employees, including part-time employees and casuals.
The group’s employees will continue to be employed under the same conditions, Kelly said in the statement.
“For employees, venue operations and customers, it is business as usual as we undertake the sale process,” he said.
In November 2014, the Keystone Group was operating 25 venues and turning over between $140-160 million.
However, the appointment of receivers applies to 17 venues, with the group previously selling a number of other venues, including the Newtown Hotel.
Also included in the appointment are Sydney venues Gazebo, Manly Wine, Sugarmill Hotel, The Rook and The Winery.
Keystone executive Richard Facioni and managing director John Duncan said in a statement on Tuesday the group is “operationally strong”, but said debt used to expand the company and Sydney’s lockout laws contributed to the company’s financial position, according to Business Insider.
“Two years ago The Keystone Hospitality Group undertook a major expansion program, including acquisitions, to become a significantly larger, national group,” Facioni and Duncan said.
“However, the debt raised to undertake its expansion, combined with changes to the local market, including lock out laws, have placed significant financial strain on the business.”
In an interview with SmartCompany in November 2014, former Keystone Group chief executive Grant Blackley, who left the company in mid-2015 to join Southern Cross Austereo, said the company had “a very clear goal to quadruple the business in four years”.
“We are well-capitalised with strong brands and we have a desire to exploit those brands,” he said at the time.
“We want to create the leading hospitality business in Australia, focused on the mid-tier market. We’re not into quick service restaurants at the bottom end, which is already well-populated and quite profitable, but we’re also not in the market of fine dining.”
Editor
Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
