The 103-strong Italian restaurant chain says it is seeking to exit 34 lossmaking sites, but is open to entering “constructive discussions” with landlords to reach “mutually agreeable terms” going forwards.
No landlords for the group’s remaining restaurants or the company’s other creditors will be affected.
It follows a strategic review of the business led by CEO Mark Jones and CFO Andrew Campbell, who joined the company in January, which concluded that “urgent action” was needed to save the brand.
The chain, founded by chef Antonio Carluccio in the 1990’s, saw pre-tax profits fall to £982,000 in the year to 25 September 2016, down from £5.3m the year before.
If the CVA is approved Carluccio’s owner Landmark, which bought the chain for £90m in 2010, will invest £10m in to the business to fund a new growth plan.
“Carluccio’s remains a very strong brand known for high-quality food, independent research shows it is extremely well regarded by the British public in the premium Italian dining space,” says Jones.
“However, the business is not immune from well-documented pressures sweeping through the casual dining sector and indeed much of the wider UK high street, including retail.
“Regrettably, this is the only course of action available and if approved, will safeguard the future of the group, protecting this strong core business. It is therefore in the best interests of the company, its people, its creditors and its customers.”
The projected timeline will see creditors vote on the CVA proposal at the end of May. In order to be passed the group requires approval from at least 75% of creditors.
The decision comes after a raft of closures on the high street, with rising rents, business rates and staff costs creating a headwind of pressures for restaurant brands.
Since January Jamie’s Italian, Byron and Prezzo have all shut restaurants using CVA’s.