Carluccio’s in Reigate’s High Street could close under restructuring plans that have been announced.
The Italian restaurant chain is proposing a Company Voluntary Arrangement (CVA) to cut rents at some of its sites: Reigate is one of them, and could shut if new terms can’t be agreed with the landlord.
A spokesperson for Carluccio’s said:
“The majority of our restaurants will be unaffected by this plan and will remain open to serve our guests as normal.
However, we have had to take the very difficult decision to potentially close our Reigate restaurant due to rising business costs and unsustainable rental levels.
We are open to entering constructive discussions with the landlord to reach new, mutually agreeable terms and remain committed to the Surrey community.
Our branches in Cobham, Richmond, Woking, Walton on Thames and our two Kingston restaurants are unaffected by the current restructuring process and will continue to deliver Carluccio’s signature all-day, Italian dining experience”
Carluccio’s proposed CVA divides its UK restaurants into 69 “Category 1” sites, which are unaffected, and 34 “Category 2” sites where a reduced rent will be paid for six months while the company meets with landlords to discuss new terms.
The CVA is subject to 75% creditor approval, with a vote due on 31 May.
When the plans were announced last week, Will Wright, restructuring partner at KPMG and a proposed supervisor of the CVA, said:
“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.”
He added that the CVA is only one part of a turnaround plan, which also includes new shareholder cash to fund growth.
The problems of the casual dining sector, and the use of CVAs by various businesses to cut rents, were both topics on Monday’s Radio 4 programme You and Yours.
Carluccio’s Reigate – website with opening hours etc.