Prezzo plans to keep open its Reigate, Redhill and Banstead restaurants, according to the chain’s Company Voluntary Arrangement filed with the High Court earlier this month.
However, a 25% rent cut is proposed over the next two years for Reigate: the restaurant is said to be unprofitable at the current rent level, unlike Redhill or Banstead.
If the CVA is voted through by creditors, the Reigate landlord will have the option to end the lease, rather than accept the cut.
No rent reduction is proposed at Redhill or Banstead: there isn’t any detail on why those sites are performing better, and whether it’s down to rent levels, customer numbers or something else.
Whatever the reason, Prezzo fans will be pleased that the three local branches are staying: the chain is planning to close 94 of its other restaurants, out of a total of 302.
Prezzo says the CVA is being put forward in light of challenges in the casual dining sector. The aim is to shape the business around a smaller profitable core of branches, through the closures and rent reductions.
When the CVA was announced earlier this month, Jon Hendry-Pickup, CEO of Prezzo, said :
“Prezzo’s core business today is fundamentally strong and has fantastic potential. However, the well-documented pressures on our industry mean a number of our restaurants are underperforming.
While we continue to be profitable and cash-generative, our position is not sustainable, so we must take decisive action now to ensure we’re able to thrive in the future.”
The CVA approval process is expected to last into April.
The Reigate, Redhill and Banstead restaurants remain open as normal.
Prezzo’s webpage about the CVA (with a link to the doc)
Edited 13 Mar 2018 as regards the month in which Prezzo announced the CVA.