Chez Gérard presses ahead with shake-up by selling Livebait outlet

Groupe Chez Gérard, the restaurant company under siege from the corporate raider Guy Naggar, yesterday signalled its determination to press ahead with a restructuring plan by putting another site up for sale, its sixth in a year.

The company, which saw its co-founder Neville Abraham retake the helm earlier this year in an attempt to turn around the business, is selling a Livebait restaurant in Wandsworth, London.

In a trading update, the group was downbeat about prospects for the restaurant sector, which has suffered from increased competition, declining tourist numbers and the economic gloom. Mr Abraham said: "Since the year end overall consumer demand for restaurants has continued to remain depressed, especially in central London."

Although no details were given, like-for-like sales at its namesake Chez Gérard, Livebait seafood and Bertorelli Italian restaurants are thought to be unchanged from the 6 per cent decline reported in September for trading since the end of June.

Mr Abraham, the chairman, warned that margins were being hit by the group's initiatives to improve its customer offer. This has seen the group revamp its menus, add new wines and make it possible for customers to pop in for a cheaper snack and drink than was possible previously.

"We are working across the group to ensure that this process is carefully managed. We continue to focus on positive cash flow and debt reduction by reducing costs without harming standards, morale or restaurant sales performances," he added.

In response to an indicative £20.6m takeover offer made in September by Mr Naggar's cash shell Paramount, the group said it had "provided significant information in order that their process of due diligence can proceed".

Among Paramount's supporters is JO Hambro Capital Management, the investment firm that built a stake of 29.7 per cent in Chez Gérard with the aim of sparking corporate activity. JO Hambro has close ties with Paramount, including a 14 per cent stake and shared board members.

The group's shares fell 5p to 80p.