Italian restaurant group Carluccio’s is the latest high street chain to come under economic pressure and has announced it is entering a ‘landlord only’ Company Voluntary Agreement (CVA), affecting up to 34 sites.
Carluccio’s stresses other creditors and the majority of their restaurants will not be affected.
CEO Mark Jones says: “Carluccio’s remains a very strong brand known for high-quality food. Independent research shows it is extremely well regarded by the British public in the premium Italian dining space.
“However, the business is not immune from well-documented pressures sweeping through the casual dining sector and indeed much of the wider UK high street, including retail.
“Regrettably this is the only course of action available and if approved, will safeguard the future of the group, protecting this strong core business. It is therefore in the best interests of the company, our people, our creditors and our customers.”
If the CVA is approved by creditors, it will pave the way for a substantial investment programme, which will see all remaining restaurants refurbished over a period of time.
Accountancy firm KPMG has been appointed to oversee the restructing of the business.
Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, said: “Carluccio’s is a well-established and much-loved part of the UK high street. But like many other businesses in the casual dining sector, in recent times the company has been adversely impacted by a combination of well-documented pressures including a gradual decline in consumer spending and increasing competition, coupled with the rising costs of labour, raw materials, rent and business rates.
“Today’s announcement follows a strategic review of the business undertaken by the company’s directors. Specifically, this CVA is designed to tackle the cost of the company’s leasehold obligations across its restaurant portfolio, which if successful, will allow the business to move forward across a core, more profitable estate.”