Some 88% of creditors voted in favour of a company voluntary agreement (CVA) at a meeting today (23 March).
The sites earmarked for closure include 62 Prezzos, the entire three-strong MEXIco brand, 28 of 31 Chimichanga tex mex restaurants, and the group’s only Cleaver grill in Cobham.
It is expected the closures will begin in April. Prezzo, which employs around 4,500 people across 302 restaurants, says staff will be made aware of the exact dates as soon as they are confirmed.
The group added that though the CVA would involve redundancies, “every effort” will be made to redeploy team members affected by the closure.
“While we continue to be profitable, the pressures on our industry have been well documented," says Prezzo chief executive Jon Hendry-Pickup.
“Despite this being a tough decision, the support given today by our creditors shows that they believe we have the right approach to transforming Prezzo in the eyes of teams, customers and stakeholders."
Falling sales
The CVA comes after private equity firm TPG, which bought Prezzo for £304m in 2015, appointed consultants at AlixPartners to review its options in January.
Like-for-like sales at Prezzo fell 8.1% for the year to December 2017, while revenue dropped 3.3% over the same period.
The CVA documents also reveal that the group owes banks and suppliers almost £220m.
Prezzo blamed rising costs and competition from brands such as Franco Manca and ASK Italian for its falling sales.
The group has since launched a ‘transformation plan’ that has seen some top-performing sites rebranded with an improved layout in a bid to shape the business around a “smaller, profitable core” of restaurants.
The CVA, which will last two years, also proposes rent reductions of between 25%-50% across 57 restaurants.