A statement from restructuring firm KordaMentha said on Monday that company employees Craig Shepard and Leanne Chesser have been appointed voluntary administrators of 22 companies in the MAdE Establishment Group.
While the appointment excludes the Yo-Chi operations which will continue to trade as usual, all other venues have stopped trading immediately.
“Employees have been paid all outstanding wages and superannuation up to the date of the appointment,” the statement read.
The Group, founded by celebrity chef George Calombaris, operates 12 restaurants and food venues in Melbourne.
Taking to Instagram, Mr Calombaris expressed his “deep sadness and regret”.
Mr Calombaris wrote: “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 effort have not proved to be enough. I am gutted it has come to this.”
According to KordaMentha, the appointment of an administrator follows declining trade across venues since the announcement of an enforceable undertaking with the Fair Work Ombudsman.
“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,” Mr Shepard said.
“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.”
Mr Shepard said the administrators would seek alternative operators for the venues and engage with other stakeholders in order to realise the Group’s assets.
A first meeting of creditors will be held next Thursday, 20 February 2020.
Mid-last year, it was revealed that Mr Calombaris’ restaurants had underpaid staff $7.8 million.
The Group’s companies Press Club, Gazi and Hellenic Republic restaurants self-reported underpayments up to 2017, explaining that they were discovered after a change in ownership and management.
“After an investigation, the FWO confirmed MAdE’s finding that employees had been incorrectly classified and underpaid due to incorrect processes and failures within its payroll and human resources functions,” the Group said at the time.
In the statement, Mr Calombaris apologised to all of the affected employees and committed to influencing positive change within the wider hospitality sector.
“We apologise to all our affected team members, past and present — as it is our people that make our restaurants great, and it is our priority to ensure all of our employees feel respected, rewarded and supported in their roles,” he said.
“We are committed to acting as a force for change in the industry and leading by example when it comes to building and promoting supportive, healthy and compliant hospitality workplaces.”