Scores of Britain’s best-known high street food and drink chains will go bust by the end of April unless banks provide immediate finance
Scores of Britain’s best-known high street food and drink chains will go bust by the end of April unless banks provide immediate finance, the head of the hospitality industry has warned.
Kate Nicholls, chief executive of the UK Hospitality trade body, said further failures are ‘inevitable’ after 80- strong restaurant chain Chiquitos – owned by The Restaurant Group, whose chief executive is ex-HBOS bank boss Andy Hornby – and the 73-outlet Carluccio’s lined up administrators.
Nicholls said short-term loans from banks are vital to cover costs pending the arrival of Government grant packages.
Struggling: Analysts said Casual Dining Group, which owns high street chains such as Bella Italia and Café Rouge, is also among the most vulnerable
She added: ‘Banks are not moving fast enough to get the money to businesses in dire straits. If companies have to wait two to three weeks for loans, jobs and livelihoods will be lost.’
Analysts said Casual Dining Group, which owns high street chains such as Bella Italia and Café Rouge, is also among the most vulnerable. The company has renegotiated rents, closed sites and cut debt over the past 18 months.
But last week it revealed a £65.6million pretax loss for the year to May 2019. Chief executive James Spragg told The Mail on Sunday: ‘We had seen better performance recently, but this is an unprecedented situation and over the coming weeks we’ll be working closely with our investors as we review our next steps.’
Yo, the Asian fast food chain, is in discussions with its staff to see how it can safeguard jobs after closing all its 70 UK sites following the lockdown order by Prime Minister Boris Johnson.
Mark Brumby, an analyst at Langton Capital, said the casual dining sector is in ‘acute distress’ and ‘busts are likely’. Carluccio’s, which restructured in 2018, last week said the coronavirus crisis had ‘exhausted the company’s cash resources’ and it had been struggling to pay staff for March.
Chief executive Mark Jones said the firm’s backer – Emirati billionaire Micky Jagtiani, who is said to have invested more than £100million in the business over the years – had ‘agreed an additional cash injection’ to fund the company long enough to access the Government scheme to pay 80 per cent of wage costs.
But the chain still called in FRP Advisory to handle an insolvency process and could file for administration within days.