Casual dining chain Carluccio’s has officially gone into administration.
Geoff Rowley and Phil Reynolds, partners at specialist business advisory firm FRP, were appointed joint administrators of the 70-strong Italian restaurant and deli group this afternoon.
Directors at the chain decided to place the company into administration after a sustained period of challenging trading conditions, which have been exacerbated by COVID-19 and the broader issues currently facing the UK’s retail and hospitality sector.
This caused it to face significant cashflow pressures and as a result it was ultimately unable to meet its financial obligations as they were due.
FRP is now urgently addressing all options for the future of Carluccio’s, which includes exploring the opportunity to mothball the business utilising government support, as well as speaking to interested parties regarding the sale of all or parts of the business.
The joint administrators said that the primary purpose of this and any administration is the rescue of the company.
They intend to access the Coronavirus Job Retention Scheme to furlough the majority of the company’s 2,000 employees whilst they assess all available options.
Geoff Rowley, joint administrator and partner at FRP, said: “We are operating in unprecedented times and the issues currently facing the hospitality sector following the onset of COVID-19 are well documented. In the absence of being able to continue to trade Carluccio’s, in the short term, we are urgently focused on the options available to preserve the future of the business and protect its employees.
“We welcome the latest update on the Coronavirus Job Retention Scheme and look forward to working with HMRC to access the support it provides for companies in administration and their employees.
“As this fast-moving situation progresses we will remain in regular communication with all employees and key stakeholders, and will provide a further update in due course.”
Michael Mulligan, insolvency partner at law firm Shakespeare Martineau, said: “These unprecedented times are taking their toll on the casual dining sector, with the few restaurants and cafes that are still open for business now reliant on takeaway and delivery custom.
“The government has stated its intention to get money moving to businesses, immediately recognising the imminent threat of insolvencies in many sectors. However, it remains to be seen how and when the processes for accessing funds and the payment mechanisms will actually be in place.
“At present, cash is king and, for those businesses without cash or access to credit lines, there is a need for businesses to understand their position immediately, to protect themselves against the financial damage from coronavirus.”