Boparan paid £3.4m for Carluccio’s

Trading at Carluccio’s had recovered before coronavirus struck, but the dramatic sales decline that accompanied lockdown left it unable to continue, an administrators report shows.

A rolling 13-week like for like sales had gone from -5% in November 2019 to -1.8% in February 2020.

Meanwhile EBITDA in February was £236k higher year on year.

However the drop off in visits and shutdown of restaurants left the Italian casual dining brand struggling, with limited head room from its banking facilities.

Carluccio’s Dubai-based owner, the multinational leisure operator Landmark, gave the restaurant brand an injection of capital, however it soon become clear that “further substantial liquidity” would be required to continue trading and meet debts.

With Landmark facing its own challenges with coronavirus, the group was unable to commit further funds to Carluccio’s.

At this stage, restructuring firm FRP Advisory was engaged to secure funds and find a buyer, but this was not possible in a short space of time.

This led to Philip Reynolds and Geoffrey Rowley of FRP being appointed administrators on 30 March, and being tasked with saving the brand’s 72 restaurants and 2,000 staff.

To reduce its rent liabilities, FRP engaged Lambert Smith Hampton property consultants to assist with negotiations with landlords.

While some were willing to offer concessions, they were unable to reach agreements with all, leading to an initial 10 marginal, loss-making sites being closed.

Meanwhile FRP went to the High Court to apply for staff to be place on furlough, saving 1,700 jobs.

The online store was re-established to give some revenue during the administration process, sell stock, and maintain Carluccio’s market position.

During the marketing process, only three substantive offers were made, with Boparan emerging with the leading offer of £4.5m for 47 sites.

This would have resulted in 14 site closures and 3019 redundancies.

Boparan were given an exclusivity period to conduct due diligence, and later reduced its offer to £3m for 30 sites, which was negotiated upwards to £3.4m for 31 sites.

This accepted offer left a further 15 site closures and 437 redundancies.

FRP said of the sites not included in the sale, nine are under offer via LSH, while a further seven leases have been offered for surrender to landlords, though none have been accepted.