Restaurant chain Lunch Garden files for bankruptcy but secures partial restart under new investor

Belgian restaurant chain Lunch Garden has filed for bankruptcy, but 42 of its 62 locations will continue operations under new ownership. Antwerp-based investment firm CIM Capital will take over the business, the company announced on Monday.

The news was confirmed to trade unions during an extraordinary works council meeting at Lunch Garden’s headquarters in Evere. The company described the decision as “a particularly difficult one” but necessary to secure a sustainable future and preserve as many jobs as possible.

Lunch Garden has faced significant financial challenges in recent years, citing the impact of Covid-19 lockdowns, rising operational costs due to inflation and underperforming locations dragging down overall results.

Market demands

Despite a positive trend in revenue and operational profits over the past two years, the company said these improvements were insufficient to fund necessary investments. 

CIM Capital, which specialises in restructuring struggling businesses, will now focus on revitalising Lunch Garden by concentrating on its most profitable locations. The firm plans to modernise the chain to better align with current market demands.

Lunch Garden’s financial troubles have been mounting for years. In 2023, its parent company, Luxembourg-based Lima Bidco, reported significant debts and a negative equity position. The group’s Belgian operations posted revenue of 94.5 million euros but suffered an operating loss of 5.4 million euros.

Broader appeal

Despite cost-cutting measures, including downsizing its workforce from 1,100 employees in 2020 to around 800 at the end of 2023, the company struggled to achieve financial stability. 

CIM Capital will now try to address Lunch Garden’s brand perception and customer base. The chain, known for its traditional Belgian dishes such as vol-au-vent and meatballs in tomato sauce, has particularly struggled to attract younger customers. 

The immediate focus will be on streamlining operations, investing in the most profitable sites and updating the restaurant concept to appeal to a broader demographic. The transition is expected to happen swiftly, with the restart intended to happen within a few days.

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