UK
23/03/2018 13:21 GMT

Prezzo To Shut 94 Restaurants With 500 Jobs To Go

Hundreds of jobs are to be axed at Prezzo after the restaurant chain agreed a restructuring plan that will see nearly 100 sites close.

The company, owned by private equity firm TPG Capital, secured the backing of creditors for Company Voluntary Arrangement (CVA) on Friday, which will allow the Italian-themed chain to exit unprofitable branches and secure rent reductions.

A total of 94 of Prezzo’s 300 outlets will close, with around 500 jobs understood to be in the firing line, although many staff will be redeployed at other restaurants.

Prezzo, which worked with AlixPartners on the restructuring, employs 4,500 people.

The CVA proposal was backed by 88% of the creditors, including landlords.

Prezzo boss Jon Hendry-Pickup said: “I would like to thank our creditors and landlords for supporting our transformation plan.

“While we continue to be profitable, the pressures on our industry have been well documented.

“Despite this being a tough decision, the support given today by our creditors shows that they believe we have the right approach to transforming Prezzo in the eyes of teams, customers and stakeholders.

“It has been a challenging time during the CVA process and I would like to thank our suppliers, colleagues and customers for their patience and support.”

The 94 restaurants identified for closure are likely to shut in April and May, Prezzo said, and staff will be made aware of the exact dates as soon as they have been confirmed.

The news comes at a bleak time for the high street and the casual dining sector in particular.

Prezzo stock
The casual dining sector has been hammered by Brexit fuelled inflation (PA)

This year has also seen burger chain Byron and Jamie’s Italian undertake CVAs as they come under increasing pressure from rising costs and falling consumer confidence.

As well as staff costs and lower footfall, the chains have been stung by the collapse in the pound, which has ramped up the cost of buying ingredients.

Soaring business rates, National Living Wage costs and the Apprenticeship Levy have also taken their toll.

News of Prezzo’s store closures come in a dismal first quarter for the UK high street, with Carpetright also announcing the prospect of closing outlets on Wednesday and Moss Bros and Mothercare also in the doldrums.

Earlier this week, New Look agreed a restructuring plan with creditors that will see it shut 60 stores, resulting in the loss of up to 980 jobs.