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Creditors of restaurant group Prezzo have backed a restructuring plan that will see it close 94 outlets - about a third of the chain.
It is estimated the move could lead to 500 job losses. The chain, which is owned by private equity firm TPG Capital, employs about 4,500 people.
The 94 closures include restaurants under the Prezzo, Mexico and Cleaver brands and all 33 Chimichanga sites .
Under the rescue plan, rents will be cut by between 25% and 50% at 57 sites.
The closures and rent reductions aim to repair the group's financial position and allow it to continue trading.
The deal was struck under a restructuring arrangement know as a company voluntary arrangement (CVA) - a step short of going into administration.
Jon Hendry-Pickup, chief executive of Prezzo, thanked the company's creditors and landlords for their support.
He said: "While we continue to be profitable, the pressures on our industry have been well documented. Despite this being a tough decision, the support given today by our creditors shows that they believe we have the right approach to transforming Prezzo in the eyes of teams, customers and stakeholders."
Media playback is unsupported on your device Media caption Trouble for High Street restaurants
The restaurants identified for closure are likely to close in April and May. Prezzo said that staff would be made aware of the exact dates as soon as they had been confirmed.
Prezzo was bought by TPG in 2014 for just over £300m.
It is the latest of a number of restaurant chains to run into difficulties.
Burger chain Byron and Jamie's Italian have both had to undergo similar restructurings this year, agreeing rescue plans with their lenders and landlords, and closing restaurants.
The wider retail market is also suffering. The UK arm of toy retailer Toys R Us and electronics chain Maplin both recently collapsed into administration.
Businesses on the High Street are facing a tough environment. Wage growth has not kept up with inflation, which has hit the spending power of shoppers.
Business costs such as the National Living Wage are going up, and business rates will rise for many firms in April. Companies are also facing increasing competition from online retailers.
List of Prezzo-branded restaurant closures
Prezzo to close almost 100 restaurants with loss of about 500 jobs
About 500 jobs are to go at Prezzo after the restaurant chain agreed a restructuring plan that will lead to the closure of nearly 100 sites.
The company, which is owned by the private equity firm TPG Capital, secured the backing of creditors for a company voluntary arrangement on Friday. The CVA will allow the Italian-themed chain to exit unprofitable branches and secure rent reductions.
A total of 94 of Prezzo’s 300 outlets will close, with about 500 jobs understood to be in danger, although many staff will be redeployed at other restaurants. Prezzo, employs 4,500 people.
The CVA proposal was backed by 88% of the creditors, including landlords.
Jon Hendry Pickup, the chief executive of Prezzo, said: “I would like to thank our creditors and landlords for supporting our transformation plan. While we continue to be profitable, the pressures on our industry have been well documented.”
Prezzo said the restaurants identified for closure were likely to shut in April and May and that staff would be made aware of the exact dates as soon as they have been confirmed.
The announcement comes at a bleak time for the high street and the casual dining sector in particular.
The burger chain Byron and Jamie’s Italian have had to undertake CVAs this year as they come under increasing pressure from rising costs and falling consumer confidence.
Quick guide What's eating the restaurant trade? Show Hide Higher costs Business rates and wages are up, as is the cost of imported food. Wages are up partly because of the rise in the legal minimum but also because finding workers is more tricky. High employment means there are fewer Brits available while the Brexit vote is putting off some EU workers who are already less keen because of the lower value of the pound. The rise of delivery Deliveroo, UberEats and Just Eat are driving a rise in demand for home delivery, cutting the number of customers eating out. Over-expansion Until 2015/16, dining out was growing strongly. Private equity firms helped mid-market chains expand, which increased competition just as the market was feeling the squeeze. Spending shifts Takeaway breakfasts and lunches are also diverting money away from sit-down restaurants. Photograph: Kristin Lee/Tetra images RF
As well as staff costs and lower footfall, the chains have been stung by the collapse in the pound, which has ramped up the cost of buying ingredients. Soaring business rates, national living wage costs and the apprenticeship levy have also taken their toll, as has oversaturation of the middle market.
It has been a difficult first quarter elsewhere on UK high street, with Carpetright announcing the prospect of closing outlets on Wednesday and Moss Bros and Mothercare also in the doldrums.
Earlier this week, New Look agreed a restructuring plan with creditors that will see it shut 60 stores, resulting in the loss of up to 980 jobs.
Italian restaurant giant Prezzo has confirmed it is shutting down 94 of its 300 branches across Britain in April and May.
These include all of Chimichanga’s 33 eateries in the UK – a Tex-Mex chain owned by Prezzo.
The huge shutdown plan – which will also see 500 jobs lost – is part of a huge restructuring plan.
It comes under a Company Voluntary Arrangement (CVA) which puts debts on hold and buys the retailer time to save itself.
It is one step away from collapsing into administration, and is the same move the now-collapsed Toys R Us and Maplin made.
***High Street on its KNEES: Brit retailers at risk of collapse NAMED***
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