Prezzo axes two North eateries

ITALIAN restaurant chain Prezzo is to shut 94 branches and axe 500 roles in a bid to save the business.

Its restaurants in Newcastle and Cramlington are among those closing.

While 500 roles will be lost, hundreds of other workers will be allocated to the company’s other restaurants.

The company, owned by private equity firm TPG Capital, yesterday secured the backing of creditors for Company Voluntary Arrangement (CVA), which will allow the Italianthemed chain to exit unprofitable branches and secure rent reductions.

The agreement will allow Prezzo to pay creditors off over a fixed period – however will also involve the closures and job cuts. Staff at the affected branches were notified earlier in the month.

The closures will include 33 under the Chimichanga brand, while a further 208 Prezzo sites will continue to operate as usual. Branches affected are expected to shut in April 2018.

News of Prezzo’s restaurant closures comes during a dismal start to the year for the UK high street, with Carpetright also 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.

Soaring business rates, National Living Wage costs and the Apprenticeship Levy have all added to the impact of lower footfall, along with the collapse in the pound, which has ramped up the cost of buying ingredients.

Last summer, Handmade Burger Co. collapsed into administration, while The Restaurant Group – which owns Frankie & Benny’s – was also forced into restructuring.

Last month Toys R Us collapsed along with electronics retailer Maplin, putting more than 5,000 roles at risk.

Prezzo owner TPG has a big stake in Poundworld, and has been considering a plan to inject up to £40 million of new capital into the business.

It comes after budget retailer 99p Stores fell into administration last year over largely unprofitable figures.

While 99p Stores’ decision did not lead to job cuts, thousands of roles have been lost on the high street in the past year.

Employees at Morrisons, Marks & Spencer, Homebase, Sainsbury’s, Asda, and B&Q are all facing cuts over the next few years.