Carluccio's formally enters administration

30-Mar-2020 - Last updated on 26-Apr-2021 at 16:34 GMT

Carluccio’s has entered administration, with nearly 2,000 staff set to be paid through a government safety net.

Geoff Rowley and Phil Reynolds at advisory firm FRP were appointed joint administrators to the 71-strong restaurant and deli group today (30 March).

In a statement, Carluccio's directors said a sustained period of challenging trading, which had been exacerbated by the coronavirus outbreak, meant the chain was "unable to meet its financial obligations as they were due".

Its Ireland operation and franchise business in the Middle East is unaffected.

The administrators will access the government's Coronavirus Job Retention Scheme to furlough the majority of Carluccio's 2,000 staff while they assess options. This will pay up to 80% of each employee's salary, with a cap of £2,500 a month.

Rescue options include a possible sale of all or parts of the business, or mothballing the company using government support.

Last week Carluccio's staff were told would only receive 50% of their owed wages for March, with CEO Mark Jones forfeiting his entire salary for the month.

“We are operating in unprecedented times and the issues currently facing the hospitality sector following the onset of COVID-19 are well documented,” said Rowley.

“In the absence of being able to continue to trade Carluccio’s, in the short term, we are urgently focused on the options available to preserve the future of the business and protect its employees.

“We welcome the latest update on the Coronavirus Job Retention Scheme and look forward to working with HMRC to access the support it provides for companies in administration and their employees.

“As this fast-moving situation progresses we will remain in regular communication with all employees and key stakeholders, and will provide a further update in due course.”

Carluccio's is the second major chain restaurant casualty of the coronavirus outbreak. The Restaurant Group last week filed a notice of its intention to appoint administrators to Chiquito, while RSM was appointed administrator to gastropub group Food & Fuel.

Burger chain Byron has also hired advisers to consider its options.