Caffe Nero announced it had entered into a Company Voluntary Arrangement (CVA) last night, blaming the second national lockdown.

Founder and CEO Gerry Ford said curbs on socialising, a drop-off of shoppers in town centres and the advice for workers to stay away from their offices had decimated trading.

With many of its outlets in town and city centres and in transport hubs, Nero has lost vast amounts of trade as its customers work from home.

Caffe Nero has appointed KPMG to advise on the CVA, with a view to renegotiating rent agreements with landlords and reduce costs.

The brand, which employs more than 6,000 people in 800 stores, said it hopes closures and job losses will be minimal.

Ford said: “Prior to Covid-19, the business had been trading strongly, and had achieved 83 consecutive quarters of sales growth. However, like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action. I am grateful for the support of our business partners, suppliers and landlords, as we address our fixed cost base so we can continue to protect jobs, which has been our focus since March.”

Ford said Nero had expanded its coffee at home range, launched Click and Collect for its app, and was offering delivery through Uber Eats.

However, with dine-in now closed for a second time, it had “little option but to launch this CVA to safeguard the future of our business.”

Will Wright, head of regional restructuring at KPMG, said: “Caffe Nero is an iconic brand on the UK’s high streets with a terrifically loyal customer base.

“However, like many others across the sector, the impact of measures introduced in response to the Covid-19 pandemic has been devastating.”

Caffe Nero’s CVA will have to be approved by its creditors and landlords.