Struggling Caffe Nero seeks landlord deal

A coffee shop chain with four branches in Tayside and Fife is on the brink of insolvency.

Caffe Nero, the UK’s third-largest coffee chain, has asked landlords for better terms and warned that closures and job losses may follow.

Chief executive Gerry Fo r d said it is now “imperative” that the business takes steps to reduce pressure, as its cafes were forced to close for a second time this year.

It has started a company voluntary arrangement ( C VA ) process in a bid to slow the flow of cash away from the business.

Caffe Nero operates from Brook Street in Broughty Ferry, Perth High Street, Dunfermline High Street and Dundee’s Murraygate.

“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,” Mr Ford said.

Caffe Nero runs 800 shops in the UK, employing about 6,000 people.

Founded in 1997 by Mr Ford, it has expanded into 11 different countries, with a total of 1,000 stores.

A Caffe Nero spokesman said that if it has to shut down any outlets, it will try to redeploy workers, and store closures and job losses will be “minimal”.

It is the latest in a long list of businesses that have been forced to take drastic measures during the Covid-19 pandemic.

Shoe seller Clarks and Pizza Express are among the other companies to enter CVAs.

A Caffe Nero customer being served.