UK high street restaurant chain Carluccio’s has collapsed into administration, putting around 2,000 jobs at risk.
The restaurant chain, which was founded by chef Antonio Carluccio in 1999, had already been hit by competition in the casual dining sector and challenging economic conditions that included rising rents, increasing labour costs, currency-related cost increases and difficulty in finding and retaining staff following the Brexit vote, before the impact of coronavirus.
More recently the chain’s 73 branches were affected by the government’s advice issued on 20 March to close all pubs, restaurants and bars due in a bid to stop the spread of the Covid-19 pandemic, with on-trade analyst CGA reporting that like-for-like restaurant sales fell by 75% in the week the government ordered all licensed premises to close down.
Administrators FRP have been appointed and are said to be urgently looking at all options for the chain’s future of the chain, including mothballing restaurants using the latest government support for businesses hit by Covid-19, or selling some – or all – of the business. Geoff Rowley, joint administrator and partner at FRP, said: “We are operating in unprecedented times and the issues currently facing the hospitality sector following the onset of Covid-19 are well documented.
“In the absence of being able to continue to trade Carluccio’s, in the short term, we are urgently focused on the options available to preserve the future of the business and protect its employees.”
Reports surfaced in March 2017 that Carluccio’s it had approached a number of private equity groups in an effort to secure a sale and a few months later, in June, the Italian restaurant chain announced it would close a third of its outlets (34 out of the total 103), after signing a company voluntary agreemeent (CVA) – an insolvency procedure that allows a restaurant to shed loss-making sites in an effort to pay back its debts, in order to restructure its business.