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George Calombaris' restaurant empire has gone into voluntary administration following its wage theft scandal
George Calombaris' restaurant group, Made Establishment, has gone into voluntary administration.
A statement from KordaMentha on Monday afternoon announced 22 businesses within the group would be affected, with 12 restaurants to cease trading "immediately".
In July, Calombaris was fined $200,000 for underpaying employees $7.8 million.
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George Calombaris' restaurant group, Made Establishment, has gone into voluntary administration following an ongoing underpayment scandal.
A statement from advisory and investment firm KordaMentha on Monday afternoon confirmed 22 companies in the Made Establishment Group were affected, with 12 restaurants ceasing trading immediately.
"The appointment excludes the Yo-Chi operations which will continue to trade as usual," the statement said. "All other venues have stopped trading immediately. Employees have been paid all outstanding wages and superannuation up to the date of the appointment."
Restaurants affected include Hellenic Republic, Gazi, and several outlets of souvlaki chain Jimmy Grants. Yo-Chi, a frozen yoghurt business, will remain operational.
In a statement posted to his Instagram, Calombaris said he was "gutted" over the news.
"Although we have all worked tirelessly and overcome the many challenges we have recently experienced, it is with deep sadness and regret that today Made Establishment has been placed into voluntary administration," the statement reads.
"On a personal note, the last few months have been the most challenging I have ever faced."
In July, Calombaris was slapped with a $200,000 fine for underpaying workers $7.8 million. He was also ordered to give a series of speeches and addresses warning fellow travellers in the industry about the “importance of workplace compliance”.
The punishment – and the news of the restaurant empire's collapse – comes among a continuing push from unions and employee advocates for more severe penalties for wage theft. A proposal from the Australian Council of Trade Unions would slug employers guilty of the most severe infractions with 5-year prison sentences and multi-million dollar fines.
However, KordaMentha blamed a number of other factors than the underpayment crisis.
In a statement, partner Craig Shepard said: “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.
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 Uber Eats and Deliveroo, increasing costs, fierce industry competition and changes in consumer tastes to favour cheaper mid-tier dining options.”
A first meeting of the company's creditors will take place on February 20.
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