‘Urgent action’ required after Carluccio’s business review

Antonio Carluccio

The senior management team at Italian restaurant chain Carluccio’s have said that “urgent action” was required to return the business to a stable footing which has led to its proposal to enter a company voluntary arrangement (CVA)

CEO Mark Jones, who together with CFO Andrew Campbell joined the business in January 2018, say the proposal for a ‘landlord-only’ CVA, which will impact 34 of the group’s restaurants, follows a strategic review of the business, and will enable it to “weather the headwinds affecting the industry”.

The CVA process is required to restructure the group by enabling the exit of a number of its 103 UK sites that are loss-making.

No landlord for the group’s remaining restaurants will be affected and nor will any of the group’s other creditors, the company said.

While a successful conclusion to the CVA process will release Carluccio’s from the lossmaking sites, the group said it is open to entering constructive discussions with affected landlords to reach “new and mutually agreeable terms”.

It said that if the CVA is approved by creditors, it will pave the way for a “far-reaching investment programme”, underpinned by new funding from the company’s majority shareholder Landmark Group, which will see all go-forward restaurants refurbished over a period of time.

Carluccio’s said this funding is conditional and will be triggered only by approval of the CVA proposal.

Jones said: “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.

“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 investment programme that will follow a successful conclusion to the CVA process will see Landmark put £10m of new funding into the business to fund the investment and growth plan, which was not available under any other scenario.

Click here to sign up to receive our new South West business news...
Close