Carluccio’s and advisory firm in talks to save business as union vows legal action over wages

Carluccio’s Marriott Maida Vale 2

Management at Italian casual dining chain Carluccio’s were understood to be deep in talks with advisors this morning as they look to save the business from becoming a casualty of the coronavirus.

Reports over the weekend suggested the chain was preparing to file for administration.

At the time of publication, the business has not entered administration nor have administrators been appointed. However, it has hired specialist restructuring firm FRP Advisory and all possibilities were being explored today.

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A spokesperson for FRP confirmed: “FRP is working with the directors of Carluccio’s to consider all options for the company in the current climate.”

Carluccio’s trades from more than 70 sites and is currently owned by the Dubai-based Jagtiani Foundation, which has invested millions into the business over the years.

Two years ago, Carluccio’s underwent a company voluntary arrangement (CVA), which saw it close 30 loss-making sites. Since then it has focused on growing profitable sites and implementing various menu and service improvements.

But last week, the company told staff that the rapid decline in sales and closure of its restaurants had exhausted its cash resources and meant it was struggling to make the payroll payment this month. It vowed to pay 50% of March wage costs, but said it could not afford more.

That prompted trade union Unite to accuse it of being guilty of “wage theft”.

Unite said represents many waiting, front-of-house and kitchen staff at the restaurant and believes the company’s actions breach employment law and are also potentially in breach of minimum wage legislation.

Dave Turnbull, national officer for the hospitality sector at Unite, said: “There is no excuse for the failure to pay the staff’s wages, especially for the hours already worked. Workers must be paid for the work undertaken, holidays taken and the tips they received. Unite’s members are lowly paid and they simply cannot afford to lose half of their wages.

“The government is doing everything it can to assist companies during the coronavirus crisis, including with substantial financial assistance, but sadly some rogue operators remain determined to needlessly penalise its own employees. “If Carluccio’s does not reverse this grossly unfair decision then Unite will take legal action in defence of our members.”

Carluccio’s seeks three-month rent hiatus and expects other chains to follow

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Andrew Seymour

The author Andrew Seymour

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