Italian restaurant group Carluccio’s has entered administration, with administrators FRP Advisory planning to use the government’s Coronavirus Job Retention Scheme to furlough most of its 2,000 employees while future avenues are considered.
Geoff Rowley, joint administrator, told Sky News:
“We are operating in unprecedented times and the issues currently facing the hospitality sector following the onset of COVID-19 are well documented.
“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.”
It has been reported that the administration came within 72 hours of the government’s announcement of emergency reforms to insolvency rules, including the suspension of the wrongful trading law; business secretary Alok Sharma has confirmed the changes would be implemented retrospectively by the end of this week.
Commenting on the news that the Italian restaurant chain has filed for administration, Unite national officer Dave Turnbull says:
“News of Carluccio’s collapse into administration could not come at a worse time for staff reeling from the coronavirus outbreak.
“Staff were only last week at their wits’ end after the company announced a grotesque 50% wage cut for March in response to the crisis.
“Now they’ve lost their jobs.
“It’s a shabby way to treat loyal staff. No worker should be left to pay the price for a company’s mismanagement and bad boardroom decisions.
“Like so many of its rivals Carluccio’s expanded too quickly after it was bought by the Dubai-based conglomerate Landmark Group in 2010.
“Carluccio’s directors and administrators must now do the decent thing in these unprecedented times and put the workers first.
“This collapse reflects very badly on the company’s directors and owner Landmark Group, who have put profit and their get rich quick scheme ahead of their hardworking staff for too long.
“Unite will be straining every sinew to ensure these workers get the sick pay, holiday pay and any outstanding wages and tips they’re owed, as well as pushing for a decent redundancy package.”
“These unprecedented times are taking their toll on the casual dining sector, with the few restaurants and cafes that are still open for business now reliant on takeaway and delivery custom,” adds Michael Mulligan, insolvency partner at law firm Shakespeare Martineau.
“The government has stated its intention to get money moving to businesses, immediately recognising the imminent threat of insolvencies in many sectors.
“However, it remains to be seen how and when the processes for accessing funds and the payment mechanisms will actually be in place.
“At present, cash is king and, for those businesses without cash or access to credit lines, there is a need for businesses to understand their position immediately, to protect themselves against the financial damage from coronavirus.”