PREZZO has had its Company Voluntary Arrangement (CVA) proposal approved by creditors, which will see the closure of 94 of its 300 UK restaurants and rent reductions at others.
More than four-fifths (88%) of creditors voted in support of the move during a shareholder meeting, with the restaurants identified for closure likely to shut in April and May.
The company has said that staff would be made aware of the exact dates “as soon as they were confirmed”. The restaurant chain said “every effort” would be made to redeploy team members affected by the closures, although the CVA involves a requirement to make redundancies. Under the proposal, rent reductions will range from 25% to 50% across 57 sites, with the CVA lasting two years.
It is understood that Prezzo owes secured creditors including Barclays Bank and the Royal Bank of Scotland £154m, while scores of unsecured creditors are owed a total of £65.7m. Among those, Prezzo owes about £600,000 in unpaid electricity bills to British Gas, £364,000 to fruit and vegetable wholesaler Reynolds Catering Supplies, and almost £120,000 to furniture company Boston Interiors.
The 94 restaurants that will shut, which includes the entire Chimichanga brand, are Abergavenny, Alton, Amersham, Arundel, Barnet (High Street), Barnstaple, Bedford (MEXIco), Belfast (Victoria Square), Belfast (Boucher Square), Beverley, Blackpool, Blandford, Bournemouth (Chimichanga), Braintree (Freeport Village), Brentwood, Bromley (Chimichanga), Canterbury, Cardiff (Chimichanga), Carlisle, Carmarthen, Catterick, Chatham (Chimichanga), Chelmsford (Baddow Road), Chester (Chimichanga), Cobham (Cleaver), Cramlington, Crawley (Chimichanga), Dalton, Darlington, Deansgate Manchester, Derby (MEXIco), Ealing (Chimichanga), Eastleigh (Chimichanga), Edinburgh (Pier Place), Falmouth, Fareham (Chimichanga), Glasgow Fort, Gloucester, Guildford, Halstead, Haywards Heath, Hereford, Hereford (Chimichanga), Hornchurch (Chimichanga), Ipswich (Chimichanga), Kettering, Kingston, Leicester (Silver Street), Lewes, Lincoln, Maidstone (MEXIco), Midhurst, Milton Keynes (Chimichanga), New Brighton, Newbury, Newcastle, Newquay, Northwood, Norwich (Thorpe Road), Nottingham (Low Pavement), Penarth, Peterborough (Chimichanga), Port Solent (Chimichanga), Poulton, Ripon, Sheffield (Valley Centertainment), Sheffield (Ecclesall Road), Silverburn Glasgow, Solihull (Chimichanga), South Woodford (Chimichanga), Southampton, Southampton (Chimichanga), St Annes on Sea, St Austell, Stamford, Stevenage (High Street), Stratford-upon-Avon, Sudbury, Taunton, Telford (Chimichanga), Tewkesbury, Wandsworth, Wandsworth (Chimichanga), Warrington, Watford (Chimichanga), West Bromwich, Wokingham, Woodley, Yate and Yeovil.
According to the terms of the CVA, leases on the 94 restaurants will be terminated in the next eight weeks.
This latest blow to one of the High Street giants comes as Carpetright announced it has flagged store closures. Up to a quarter of Carpetright’s 409 UK outlets could be shut as the retailer battles to get its finances back on track after paying the price for expansion under previous management.
Moss Bros has sounded a profit warning and Mothercare has scrambled to raise funds after a reprieve from its lenders.
New Look have announced that they will close 60 UK stores and cut 1,000 jobs as part of an agreed restructuring plan.
The stores will close within 12 months and some staff may be redeployed.