Chief executive Gerry Ford, who founded Caffè Nero in 1997, says the high street coffee chain has lost vast amounts of trade as a result of city centre office workers being told to work from home.
With many Nero outlets located in town and city centres and in transport hubs, he adds that curbs on socialising and a drop-off of shoppers in town centres have also contributed to a decimation in sales.
The group, which employs more than 6,000 people across 800 stores, has appointed KPMG to advise on the CVA with a view to renegotiating rent agreements with landlords and reduce costs.
“Prior to Covid-19, the business had been trading strongly, and had achieved 83 consecutive quarters of sales growth," says Ford.
"However, like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action.
"I am grateful for the support of our business partners, suppliers and landlords, as we address our fixed cost base so we can continue to protect jobs, which has been our focus since March.”
Ford adds that Nero had expanded its coffee-at-home range; launched Click-and-Collect for its app; and was offering delivery through Uber Eats.
However, with dine-in now closed for a second time due to the nationwide lockdown in England, he had 'little option' but to launch a CVA to safeguard the future of the business.
It is hoped that the number of site closures and job losses will be minimal.
“Caffe Nero is an iconic brand on the UK’s high streets with a terrifically loyal customer base," says Will Wright, head of regional restructuring at KPMG.
“However, like many others across the sector, the impact of measures introduced in response to the Covid-19 pandemic has been devastating.”
The impact of ongoing Coronavirus restrictions on trade has already had a severe impact on many of Caffe Nero's rivals.
In September it was reported that fellow high street coffee chain Costa had warned that up to 1,650 jobs across its estate were at risk of redundancy as a result of the ongoing impact on trade caused by the pandemic.
Meanwhile, last month Pret A Manger announced it was to close a further six sites and cut around 400 more jobs after its recovery was hampered by a tightening of Coronavirus restrictions and rising case numbers.
To go ahead, Caffe Nero’s CVA will have to be approved by its creditors and landlords.