Thursday 2 July 2020 5:59 pm

Cafe Rouge and Bella Italia owner cuts 1,900 jobs as it collapses into administration

The owner of high street restaurant chains Cafe Rouge and Bella Italia has collapsed into administration and slashed 1,900 jobs, as the hospitality sector continues to feel the strain of the pandemic.

Ninety one of Casual Dining Group’s restaurant outlets will close with immediate effect, slashing 1,900 of the firm’s 6,000 staff in the process. 

Read more: Boisdale launches campaign to allow live music in restaurants

Casual Dining Group said that given the “extreme operating environment” it was in the best interests of stakeholders to enter administration, in a bid to allow the company to settle negotiations with landlords.

Alix Partners have been appointed as administrators, and are seeking offers for all or parts of the remaining business. 

“Multiple offers” are said to have been made for the business, but all of them “envisage a reduced restaurant estate”.

Most of the closures will affect Cafe Rouge and Bella Italia chains, though 11 Las Iguanas and three Belgo restaurants will also shut. Several airport sites are also expected to be among those closing. 

Bella Italia’s restaurants in Baker Street, Islington, Colliers Wood and Shaftesbury Avenue, are set to shutter, while Belgo’s Covent Garden site will close. No Cafe Rouge outlets in London will shut.

Chief executive James Spragg said: “After reviewing all our options with advisors, it became clear that we needed to take this action in order to protect the business and secure the best possible future for Casual Dining Group as we look to conclude a potential sale.”

“We are acutely aware of our duty to all employees and recognise that this is an incredibly difficult time for them,” he added.

“Working alongside the administrators we will do everything we can to support them through this process with a view to preserving as much employment as we are able to.”

Casual Dining Group had previously attempted to mitigate difficulties in the sector by reducing its restaurant count from 300 to 250 and selling off Spanish tapas chain La Tasca.

Casual Dining Group posted revenue of £327.4m in its last annual accounts, however the group is thought to have taken a huge hit from coronavirus, after businesses were forced to shutter in March.

It comes as restaurant chain Byron Burger yesterday filed a notice to appoint administrators, as it tries to seek a rescue deal.

The chain has more than 1,200 stand at 52 sites across the UK. It is believed to be in talks with potential buyers in a pre-pack administration deal.

Pubs and restaurants are set to reopen this Saturday, with strict social distancing rules in place.

Read more: Leicester lockdown: Pubs and restaurants may stay closed for two more weeks

Under the new rules, venues must significantly reduce their capacity to ensure tables are spaced out at least one metre away, and may even require perspex screens and barriers to separate people.

Pubs and restaurants will be required to keep a register of customers’ contact details for 21 days to help assist with the government’s track and trace programme.

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