Carluccio’s confirms CVA resulting in 34 closures

by XPRESS, 18 May 2018

The proposal is a “landlord only” CVA and creditors will vote on the CVA on Thursday, 31 May.

KPMG said it would spend the coming weeks in talks with creditors to ensure they understand the full detail of the proposal.

It will need approval from 75% of creditors to go ahead.

If approved, majority shareholder Landmark Group will inject £10m of fresh funding into Carluccio’s.

A successful conclusion to the CVA process would release Carluccio’s from loss-making sites and the group has said it is open to entering constructive discussions with affected landlords to reach new and mutually agreeable terms.

The CVA proposal divides the company’s sites into two categories, with 69 “Category 1” sites, which will be retained at current rents.

For the remaining 34 “Category 2” sites, a reduced rent, 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.

Carluccio’s chief executive Mark 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 CVA follows a strategic review of Carluccio’s by KPMG that concluded urgent action was required to enable the business to weather headwinds affecting the industry and return it to a stable footing.

Former chief executive Neil Wickers stepped down in January after three years in the post.

He was replaced by Goals Soccer Centres boss Jones, who previously headed Pizza Hut’s UK business.

Carluccio’s was co-founded by Antonio Carluccio, the restaurateur and television chef, who died last November.

He cut his stake substantially more than a decade ago.

In its latest accounts available at Companies House, Carluccio’s reported UK turnover increased by 2.7% to £140.9m for the year ending 25 September 2016.

Ebitda before non-cash exceptional expenses fell 12% to £13.2m (2015: £15.0m).

It is believed the Ebitda performance has further declined significantly during the 2016/17 financial year.

Article credit: Propel info