Prezzo feels the pain of re­struc­tur­ing

The Daily Telegraph - Business - - Business - By Oliver Gill The

CA­SUAL din­ing chain Prezzo swung sharply into the red last year as it counted the cost of a painful re­struc­tur­ing process.

Trad­ing en­tity Prezzo Lim­ited posted a loss be­fore tax of £65.7m in the year to De­cem­ber 2017, com­pared with a profit of £5.3m in 2016, ac­cord­ing to ac­counts filed with Com­pa­nies House.

Par­ent com­pany Papa Topco racked up a loss be­fore tax of £220.9m, with US pri­vate eq­uity backer TPG Cap­i­tal forced to write down its in­ter­est in the res­tau­rant chain.

Prezzo shut 94 restau­rants in Fe­bru­ary as part of a com­pany vol­un­tary ar­range­ment (CVA) that saw rents cut by be­tween 25pc and 50pc across 57 sites.

Karen Jones, founder of Cafe Rouge, be­came ex­ec­u­tive chair­man in June 2018 and had to fend off an at­tempt by buy-out firm Car­lyle to seize con­trol through a debt- for-eq­uity swap.

Prezzo struck a deal with len­ders led by Bar­clays in Au­gust that saw £155m writ­ten down to £51m in ex­change for a slice of the com­pany’s eq­uity.

With Prezzo set to cel­e­brate its 18th birth­day this week, Ms Jones said the chain was now fo­cused on 186 “prof­itable-only restau­rants”. She told

“It is about get­ting growth from your ex­ist­ing sites by be­ing bet­ter, not hav­ing a very fast roll­out. I don’t think it is par­tic­u­larly help­ful to dwell on the past.”

Prezzo is one of a num­ber of high­pro­file ca­sual din­ing ca­su­al­ties. Burger chain By­ron, Jamie’s Ital­ian and Gau­cho are among oth­ers to have en­coun­tered fi­nan­cial dif­fi­cul­ties in 2018.

Ms Jones said the com­pany is fo­cused on “how it will con­tinue and flour­ish into the fu­ture”.

“The 2017 re­sults are a re­flec­tion of the ef­fects of the head­winds fac­ing the ca­sual din­ing sec­tor and the per­for­mance and shape of the busi­ness dur­ing that year, not as it is today,” she said.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.