Prezzo, the excessive avenue restaurant chain, is bracing for a court docket showdown with landlords over the closure of a 3rd of its websites.
Sky News has learnt that Prezzo will write to the house owners of its 143-strong property on Tuesday to inform them of the authorized course of via which it intends to close unprofitable shops.
City sources mentioned the chain, which is owned by Cain International, supposed to make use of a proper restructuring plan to drive via the overhaul.
Prezzo introduced final week that it was axing 46 shops with the lack of greater than 800 jobs.
It mentioned rising vitality payments and double-digit value inflation on objects together with dough balls and spaghetti had hit the monetary efficiency of a lot of its websites.
Landlords, who embody a few of Britain’s greatest business property-owners, will be capable of vote at a listening to on May 22, in line with an insider.
However, the plan is definite to be accredited due to Cain’s standing as Prezzo’s largest creditor, the insider added.
The chain’s remaining websites is not going to be the topic of any lease cuts.
Prezzo’s use of a restructuring plan is prone to be controversial amongst landlords after the mechanism started getting used through the pandemic.
It made no reference to the plan in final week’s announcement concerning the closures.
Sky News revealed on the weekend that Fitness First, the health club chain owned by JJB Sports founder Dave Whelan, can also be planning to take that path to closing websites and imposing steep lease cuts on property-owners.
A restructuring plan can solely be used the place the choice final result is insolvency.
Dean Challenger, chief government of Prezzo, mentioned final week: “The cost-of-living crisis, the changing face of the high street and soaring inflation has made it impossible to keep all our restaurants operating profitably.
“That is why we’ve got made the troublesome choice to shut 46 websites the place the post-Covid restoration has proved more durable than we had hoped.
“We believe the tough decisions we are making today will ensure Prezzo can continue serving communities with high-quality, accessible Italian-inspired meals for many more years to come.”
Prezzo declined to touch upon the restructuring plan, on which FRP Advisory is performing.