LONDON, United Kingdom – Britain-based Italian restaurant chain Carluccio’s said on Monday, March 30, it has collapsed into administration, blaming challenging conditions made worse by the coronavirus outbreak.
The company said in a statement that it has appointed advisory firm FRP to oversee administration – the process whereby a troubled company calls in outside expertise to try and minimize job losses.
The news threatens 2,000 employees at Carluccio’s, which has 71 restaurants around Britain.
The decision was taken “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,” the statement said.
“The company faced significant cashflow pressures and as a result was ultimately unable to meet its financial obligations.” (READ: UK hospitality sector calls for help to combat virus woes)
Administrators will access the British government’s Coronavirus Job Retention Scheme to furlough most of the staff while assessing options.
Meanwhile, they are meeting interested parties regarding the sale of all or chunks of the business.
Carluccio’s said its Irish operations and Middle East franchises would not be affected by the decision.
In further high-street gloom on Monday, controversial rent-to-own retailer BrightHouse also collapsed into administration – placing 2,400 jobs at risk.
BrightHouse, which has been accused of exploiting the poor with extremely high rates of interest, made the announcement days after closing around 240 stores due to the coronavirus outbreak.
Non-essential businesses have been told to temporarily shut down to contain the spread of COVID-19 in Britain, which is two weeks into a nationwide lockdown.
Interactive Investor analyst Richard Hunter told Agence France-Presse, “To have been thrust into the list of businesses forced to close down temporarily as a result of the COVID-19 outbreak seems to have been the final straw for several.”
“Fixed costs remain but revenues all but evaporate,” Hunter noted.
“For those companies already working on wafer-thin margins, this has proved to be a step too far,” he said. – Rappler.com