Carluccio’s, the Italian all-day casual dining restaurant group, has today announced that its proposal to enter a Company Voluntary Arrangement (an agreement a distressed business reaches with companies it owes monies to, which allows it to keep trading while paying off its debt) has — as was expected — been “supported by a majority of its creditors.” (The majority of those creditors are landlords.)
The restructuring proposal, announced earlier this month, was aimed at facilitating the closure of a “minority number” of restaurants from its 103 UK sites that are currently loss-making. The process will impact up to 30 restaurants. The company said that no other landlord across the group’s remaining portfolio is affected and nor are any of the group’s other creditors.
Following what the company is calling “a positive outcome” it says it can now undergo “a far-reaching investment programme, underpinned by new funding into the business that will drive a comprehensive programme of restaurant refurbishments.” A fresh round of investment into the group was conditioned on its relinquishing those unsuccessful sites.
And despite the fact that earlier this year representatives denied Carluccio’s was planning to restructure, saying it was “largely debt-free,” today’s developments are said to “follow a strategic review of the business,” led by CEO Mark Jones, who was appointed in January 2018.
Jones said today: “We are pleased that our proposal for a CVA has been approved by our creditors. This vote was vital to protect our strong core business and the Carluccio’s brand.
“I would like 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.
“The positive outcome enables us to kick-start an extensive programme of reinvigoration across our estate — with the aim of elevating the guest experience and underpinned by our brand ethos of minimum of fuss, maximum of flavour, which was so passionately championed by our founder Antonio Carluccio.”
Carluccio’s says that it will make further announcements on the restaurant closures “when practicable.” It remains unknown how many London sites will be affected, but it is understood that Westfield London (Hammersmith), Islington, Muswell Hill, and Chiswick are all vulnerable.
Carluccio’s is certainly not alone in its struggles on the high street. Other British chains, including Byron, Jamie’s Italian, Strada, and Prezzo have all been forced to enter CVAs, restructure, and close restaurants over the course of the past 12 months.