The approval of a Company Voluntary Arrangement (CVA) plan by Carluccio’s creditors will kickstart a “comprehensive turnaround programme” involving investment of up to £250,000 per site within the brand’s core estate.
The Fresca programme is being funded by an extra £10m of investment from Carluccio’s backers, the Lanbdmark Group, which was conditional on yesterday’s CVA programme being approved by creditors. At yesterday’s meeting, 91% voted in favour of the scheme, however a 28-day challenge period now follows, during which landlords can dispute the terms of the CVA.
The CVA listed 35 restaurants which the company considers unviable in their current form and where discussions will take place over their future. It is as yet unclear how many are likely to close, with yesterday’s statement for the company highlighting ‘up to 30 restaurants’ being affected by the CVA.
The restaurants covered by the CVA will see a reduced rent, equivalent to 67%, will be paid for the next six months, while discussions with the landlords continue.
The Fresca programme is based on a number of initiatives, partly designed in response to customer feedback. It involves refreshing the look and feel of the restaurants, improving outdoor terraces and installing small bar areas and open kitchens to help highlight the freshness of the menu.
The additional investment will also allow for increasing the number of available covers where appropriate; operational initiatives including improvements to customer service, labour optimisation and procurement streamlining; the launch of new online management training schemes; developing the customer proposition to enhance the dining experience and better integrating the retail and deli offering; further development of an omni-channel marketing strategy, to better leverage social media and online effectiveness; and investment in core systems to improve resilience and enhance the customer experience.
The decision to adopt a CVA followed a strategic review of the business, led by new CEO Mark Jones, who joined the business in January 2018. Commenting on the vote, Jones said: “We are pleased that our proposal for a CVA has been approved by our creditors. This vote was vital to protect our strong core business and the Carluccio’s brand.
“I would like thank our landlords for their support. We now look forward to a positive future and the on-going development of the Carluccio’s business and of course our passionate people.
“The positive outcome enables us to kick-start an extensive programme of reinvigoration across our estate - with the aim of elevating the guest experience and underpinned by our brand ethos of minimum of fuss, maximum of flavour, which was so passionately championed by our founder Antonio Carluccio.”
Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: “This is an important step forward for the business, allowing Carluccio’s to complete its financial restructuring plan and embark on a comprehensive operational transformation programme.
“Today’s vote saw 91% of all voting creditors choosing to approve the CVA, surpassing the 75% total required in order to pass the resolution.”