Prezzo, the Italian restaurant chain, has become the industry’s latest big player to draft in consultants to consider its post-coronavirus funding options.
Sky News has learnt that Prezzo has appointed FRP Advisory, which is currently acting as administrator to Carluccio’s, to explore the implications of the COVID-19 crisis for its balance sheet.
The move comes less than two years after the chain axed dozens of outlets through a financial restructuring that included a debt-for-equity swap.
It now trades from 180 restaurants, all of which the company says were profitable before the coronavirus outbreak.
A stake in Prezzo is still owned by TPG, the American buyout giant, with a number of other funds also holding shares in it.
Most of the chain’s 3,000 employees have been furloughed under the Coronavirus Job Retention Scheme.
The company is run by Karen Jones, its executive chairman, who is one of the best-known figures in Britain’s hospitality industry.
A Prezzo spokeswoman said: “We entered this entirely unexpected closure after a period of strong trading, which has given us the impetus and momentum to be able to drive through to reopening.
“Given the continuing uncertainty around the reopening of hospitality in the UK, appointing advisers is a sensible precautionary measure to ensure we have best advice available to us as we respond to this pandemic and look forward to the important period of reopening.”
Prezzo’s appointment of FRP comes as restaurant-owners across the UK urge the government not to end the lockdown on the industry too quickly, or risk triggering a wave of permanent closures.
Sky News reported earlier this week that restaurateurs including the celebrity chef Rick Stein and Tom Kerridge – the owner of Britain’s first pub to be awarded two Michelin stars – had been asked to sign an industry-wide letter to Alok Sharma, the business secretary, and Cabinet Office minister Michael Gove.
“We are concerned that opening the restaurant sector too early could lead to a substantial number of businesses failing, given the discrepancy between the costs they will incur and the revenues they will be able to achieve,” the draft letter said.
“The impact on long-term employment in the sector, and wider economic damage this would cause, would be very painful.”
The restaurant chiefs’ plea to the government underlines the fears of many in the industry about its post-lockdown recovery, with consumer finances under severe strain and customers concerned about the possible health implications of eating out.
“We strongly believe that a removal of the lockdown as soon as it safe to do is crucial for the restaurant sector, but we would point out that an early, partial reopening of restaurant businesses as the Government starts to lift lockdown restrictions may be counterproductive,” the restaurateurs’ letter is understood to say.
“Unfortunately, it will not be possible for most restaurants to open in an economical way until we can ensure a critical mass of customer visits.
As administrators to Carluccio’s, the restaurant chain which collapsed last month, FRP is now in exclusive talks with the owner of Giraffe about a sale that would preserve some of the company’s 2000 jobs.
Since the coronavirus outbreak began, restaurant chains including Wahaca and Byron have called in advisers to help restructure their finances.
In addition to Carluccio’s, Chiquito’s has fallen into administration, while Le Pain Quotidien may finalise a sale using a pre-pack insolvency process.