The Italian casual dining chain, Carluccio’s has proposed a company voluntary arrangement (CVA), with over a third of the estate at risk of closure.
Founded in 1999 by Antonio Carluccio, who died last year, the company currently operates 103 restaurants across the UK.
The CVA proposal divides the company’s sites into two categories, with the CVA proposing a reduced rent for 34 sites, equivalent to 67%, will be paid for six months, while the company engages with landlords to agree the basis of any continued trading from these premises. The remaining 69 restaurants would be retained at current rents.
The proposed supervisors of the CVA are Will Wright and Rob Croxen from KPMG’s restructuring practice. Wright stated, '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.
'Today’s announcement follows a strategic review of the business undertaken by the company’s directors. Specifically, this CVA is designed to tackle the cost of the company’s leasehold obligations across its restaurant portfolio, which if successful, will allow the business to move forward across a core, more profitable estate.
'Crucially, it forms one element of a wider turnaround plan which, pursuant to the CVA’s approval, will see an injection of funding into the business from the company’s majority shareholder, to fund an extensive and far-reaching investment and growth plan.'
Carluccio’s needs to secure at least 75% creditor approval for the CVA for it to proceed.