Carluccio’s sets out restructuring plan with 34 stores likely to close
The restaurant chain has been hit by rising costs.
Carluccio’s has unveiled a restructuring plan that will likely lead to 34 restaurant closures.
The business, which was founded by the late Antonio Carluccio in 1999, has 103 restaurants in the UK but is seeking approval from landlords to slash rents in a restructuring plan known as a Company Voluntary Agreement (CVA).
The CVA, put together by restructuring advisers at KPMG, will allow Carluccio’s to pay a reduced rent for six months while the board engages with landlords about possible closures.
Carluccio's is a well-established and much-loved part of the UK high street. Will Wright
Carluccio’s chief executive Mark Jones said: “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, its people, its creditors and its customers.”
Landlords will vote on the CVA on May 31, and Carluccio’s will need approval from 75% of creditors for the plan to go ahead.
Will Wright, restructuring partner at KPMG, 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.”
Other restaurants that have undertaken CVAs so far this year include Byron, Prezzo and Jamie’s Italian.
A number of retailers, including New Look and House of Fraser, have also prepared CVAs in a bid to stay afloat.
The high street has come under strain from a combination of rising rents, business rates and labour costs, at a time when discretionary incomes have come under pressure.