Carluccio’s on the brink of closing 30 sites

Italian restaurant chain Carluccio’s could close more than 30 venues after signing a Company Voluntary Agreement (CVA) in a bid to restructure its business and stay afloat while fending off debts.

On Thursday 91% of the group’s creditors approved a CVA – an insolvency procedure that allows a restaurant to shed loss-making sites in an effort to pay back its debts. It follows reports in March that the chain had approached a number of private equity groups in an effort to secure a sale.

Carluccio’s is the latest restaurant chain to run into financial trouble in recent months, with burger brand Byron, and Italian-style chains Jamie’s Italian, Prezzo and Strada all suffering similar challenges and closing a number of outlets. Byron was forced to close several branches in London, while a third of Jamie’s Italian locations were shut down. An increasingly competitive restaurant sector, rising rents, growing labour costs and difficulty in finding and retaining staff following the Brexit vote have all been blamed for the challenging economic conditions faced by restaurants.

The CVA affects 34 of the chain’s 103 restaurants, whose landlords have agreed to cut rent bills by a third for six months, however these sites will close at the end of that period unless a new, reduced rent deal can be agreed.

“We are pleased that our proposal for a CVA has been approved by our creditors,” Mark Jones, chief executive of Carluccio’s, said in a statement. “This vote was vital to protect our strong core business and the Carluccio’s brand. I would like to thank our landlords for their support. We now look forward to a positive future and the on-going development of the Carluccio’s business and of course our passionate people.”

Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, added: “This is an important step forward for the business, allowing Carluccio’s to complete its financial restructuring plan and embark on a comprehensive operational transformation programme.”

Carluccio’s is controlled by the Landmark Group, the Dubai-based retail and hospitality conglomerate. It has promised to finance a multimillion-pound refurbishment programme for the 69 restaurants unaffected by the CVA.

The restaurant chain was founded by the late chef Antonio Carluccio in 1999.