Prezzo braces for landlord showdown over restaurant closures

Prezzo, the excessive road 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 retailers with the lack of greater than 800 jobs.

It mentioned rising power payments and double-digit value inflation on gadgets together with dough balls and spaghetti had hit the monetary efficiency of lots of its websites.

Landlords, who embody a few of Britain’s largest business property-owners, will be capable to vote at a listening to on May 22, in line with an insider.

However, the plan is definite to be permitted due to Cain’s standing as Prezzo’s largest creditor, the insider added.

The chain’s remaining websites won’t 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 gymnasium chain owned by JJB Sports founder Dave Whelan, can 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 end 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 have now made the troublesome resolution to shut 46 websites the place the post-Covid restoration has proved tougher 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.