CARLUCCIO’S could close nearly a third of it’s UK restaurants as part of a restructuring deal.
This follows after the Italian restaurant chain admitted earlier this month that it needed “urgent action” to keep the franchise afloat.
The chain currently has 103 restaurants across the UK but could close 30 loss making stores after the company’s creditors agreed to a rescue plan.
The rescue plan was approved by 90 per cent of the company’s creditors, allowing the company to pay off it’s debts over a period time without having to pay any further costs.
Carluccio’s profits have fallen drastically over the last two years due to rising costs – in 2016 the chain’s pre-tax profits fell by 81 per cent.
The Italian chain is following the likes of Jamie’s Italian, Byron and Prezzo who have all had to enter restructuring deals because of the growing cost of rent on the high street and increases to the National Living Wage.
MORE ON MONEY
The group of around 30 restaurants marked for possible closure will have their rent bills cut by a third for six months under the rescue plan.
Unless a new reduced rent deal can be agreed by Carluccio’s and it’s creditors by the end of this period the restaurants will close.
These 30 or so restaurants employ around 500 people, potentially putting their jobs at risk.
Under the rescue plan, Carluccio’s majority owner, Landmark Group will pump £10million into the remaining restaurants to upgrade the franchise.
The Dubai-based Landmark Group bought the Italian chain for £90million in 2010.
CEO of Carluccio’s Mark Jones said: “We are pleased that our proposal for a CVA has been approved by our creditors.”
“This vote was vital to protect our strong core business and the Carluccio’s brand.”
“I would like thank our landlords for their support.
“We now look forward to a positive future and the on-going development of the Carluccio’s business and of course our passionate people.”
“The positive outcome enables us to kick-start an extensive programme of reinvigoration across our estate – with the aim of elevating the guest experience and underpinned by our brand ethos of minimum of fuss, maximum of flavour, which was so passionately championed by our founder Antonio Carluccio.”
Carluccio’s will give further details on closures “when practicable.”
A number of other UK retail stores such as Carpetright and Mothercare have had to enter into a CVA rescue plan to get rid of loss making stores.
Carpetright had to close 92 stores, axing 300 jobs at these loss making stores.
While Mothercare will shut one third of it’s UK stores to stay afloat – Sky news estimated that these closures could amount to 1,000 job losses.
We pay for your stories! Do you have a story for The Sun Online Money team? Email us at firstname.lastname@example.org or call 0207 78 24516. Don’t forget to join the Sun Money’s Facebook group for the latest bargains and money-saving advice.