Italian Chain Prezzo Joins the Private Equity Restaurant Carousel

The coronavirus pandemic continues sticking pins in casual dining bubbles

High street survivor Prezzo is clinging on to its place in the Italian chain restaurant landscape after completing its takeover by private equity firm Cain International, as reported by Big Hospitality. The takeover, which buys the restaurant group out of administration, will close 22 restaurants at the cost of 216 jobs.

Cain International acquired Prezzo’s debt and equity at the start of December 2020 alongside investment from the restaurant chain’s management. And if the last 12 months and two-three years have been rough for chain restaurants, for Prezzo, they’ve been exponentially worse. It closed over 100 restaurants in 2018 in the midst of the “casual dining crunch,” which halved its annual operating losses to £29.7 million. Cain International chair Jonathan Goldstein called it “a strong hospitality business,” a week after the firm considered putting its new purchase through an insolvency process.

Bella Italia, Cafe Rouge, Gourmet Burger Kitchen, Byron Burger, Carluccio’s, and Pizza Express are all examples of successful, small restaurant brands that have been inflated by private equity beyond a scale that their offer can withstand, creating a fragile business model that, as the “casual dining crunch” of 2018 proved, was already becoming unsustainable, pandemic or no pandemic. Coronavirus has proved a pin for many of their bubbles; Prezzo will be hoping the same is not true of its own. [Big Hospitality]

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