Gaucho could do another diffusion brand despite Cau's failings, says CEO

The steakhouse group, which is currently in administration and seeking a buyer, could look to further leverage the Gaucho brand by creating a more affordable sister brand for less prime locations, he says.

Meakin’s comments come after Cau, the more casual offshoot of the Gaucho brand that was introduced to the UK in 2011, closed its doors on 19 July after the company went into administration​​.

The brand was said to have struggled in the oversupplied casual dining sector with “rapid over-expansion, poor site selection, onerous lease arrangements and a fundamentally poor guest proposition,” according to administrator Deloitte.

Yesterday, in an exclusive interview with Meakin​​, BigHospitality​ reported that it was "business as usual" for the 16-strong steakhouse group, which has plans to open 6-8 more Gauchos in the UK in the next few years as well as look at further opportunities in western Europe and the Far East.

Meakin, however, also hasn’t ruled out the possibility of creating another Gaucho offshoot, but one he says would be more closely aligned with the parent brand.

“Cau was set up deliberately to be very different to Gaucho - I think there was a concern that setting up a brand that was too explicitly linked to Gaucho could damage it,” he says.

“I have a completely different perspective on that and think that consumers understand that brands can operate at different levels in a market.”

He cites the growth of The Ivy brand, The Cinnamon Collection and of The Wolseley, with its new cafe, as example of brands that are rolling out sister concepts that have close links to the parent brand.

“Consumers go to Gaucho and spend £70 per head, but why not go to a Club Gaucho, or a Gauchito, or an Assado Gaucho or something linked to Gaucho that gives the guest reassurance but at a different price point?”

Before Cau went into administration, Meakin says he had been considering taking three of four of its locations and trialling a diffusion brand. He believes that any strong diffusion brand of Gaucho could have the potential of hitting up to 30 sites.

“If you’ve got a brand like Gaucho the right thing to do is to leverage it.”