Prezzo feels the pain of restructuring
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.