Carluccio’s Appoints Financial Advisors But Insists ‘No Plans to Restructure’

The so-called casual dining sector crisis — and, with each week, it looks more and more like a crisis — is showing no signs of relenting: the latest indication of the difficulties facing the sector came this weekend as Italian chain Carluccio’s was revealed to be working with auditors KPMG to, it said, “assess its options.”

The most recent accounts available for the company (the year up to 25 September 2016), show a 2.7 percent revenue rise to £140 million. However, it’s pre-tax profits fell to £982,000 from £5.2 million. “Exceptional” costs were cited as to the reason why.

Carluccio’s told The Sunday Times, which first reported the news, that it was “principally debt free” and could manage in softer trading conditions. When approached by Eater, a spokeswoman said: “[Today’s news] is sheer speculation and there are currently no plans to restructure.”

But that doesn’t mean it won’t: labour costs, business rates, and the increasing cost of site rents and food and drink prices are hitting restaurants; this fragile state looks likely to continue apace.

After all, if Carluccio’s is struggling, it would not be alone among other medium-sized restaurant operators. The Italian chain, which is owned by the Dubai-based Landmark Group, follows fellow high street staples such as Byron, Jamie’s Italian, Strada, and Prezzo in bringing in restructuring experts.

Jamie’s Italian is closing at least 12 sites. Prezzo, meanwhile, is closing up to 94; around 1,000 members of staff are set to lose their jobs.

Carluccio’s was co-founded by chef and restaurateur Antonio Carcluccio as an Italian food shop in 1991. The first cafe opened in Market Place, London, in 1999, and today the company has 102 locations across the UK. The chef, who died in November last year aged 80, sold his majority stake in the company more than ten years ago.

Its simple and accessible food and drink has proved popular with British diners over the years. Today, however, Carluccio’s faces pressure in an increasingly competitive market, not just from other high-street chains, but from increasingly more accessible independents, like Padella, Sorella, Flour and Grape and Sager and Wilde on Paradise Row. What’s more, as has been widely reported, the hospitality sector in general has been adversely affected since the Brexit vote.

It is early days for Carluccio’s and nothing has yet been confirmed. The Landmark Group was unavailable for comment.