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Caffe Nero seeks CVA after toll of second lockdown becomes too much

Caffe Nero coffee cup

The second lockdown has forced Caffe Nero into seeking a company voluntary arrangement (CVA).

Reports surfaced last week that the coffee shop chain, which has 800 sites in the UK and 200 abroad, had called in advisers to understand the implications of going down the CVA route.

It is also believed to have held talks with the British Property Federation.

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While the company was able to navigate the first lockdown, founder Gerry Ford said the crisis had “decimated” its sales after 83 consecutive quarters of growth prior to March.

It has been badly hit by people continuing to work from home and a reduction in footfall to commuter and city centre locations, where many of its stores are located.

“Like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action,” said Mr Ford.

He added that the CVA would allow the company to “better manage its fixed costs moving forward”.

It has not been announced if any stores will close, with the company thought to prefer a renegotiation of its terms with landlords and creditors.

KPMG has been appointed to manage the CVA.

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Andrew Seymour

The author Andrew Seymour

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