Carluccio's has confirmed that it will close around nearly a third of its restaurants, making it the latest high street name to ask for a reprieve from landlords.
The Italian chain is following the likes of Prezzo, Jamie's Italian and Byron in entering a company voluntary arrangement (CVA).
This means it will shut some underperforming sites, putting 34 at risk of closure. If the proposals are approved by landlords, a reduced rate equivalent to 67 per cent will be paid for six months while the company holds crunch talks on the future of the restaurants.
While a full list has not yet been disclosed, City A.M. understands that a handful of London branches are likely to be affected, including one in Westfield Shepherd's Bush.
Chief executive Mark Jones, who joined the company earlier this year, said: “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.”
It is a busy day for the company's advisers at KPMG, who are also overseeing the Mothercare CVA which was announced today.
Commenting on the situation at Carluccio's, KPMG restructuring partner Will Wright said: “Carluccio’s is a well-established and much-loved part of the UK high street. But like many other businesses in the casual dining sector, in recent times the company has been adversely impacted by a combination of well-documented pressures including a gradual decline in consumer spending and increasing competition, coupled with the rising costs of labour, raw materials, rent and business rates."
Creditors will vote on the proposals in two weeks' time on 31 May.