Prezzo announces closure of 94 restaurants

The Prezzo restaurant chain has announced that creditors have officially backed a proposal that will see the group close 94 of its restaurants, which amounts to around one third of the chain's sites.

The decision, which is expected to lead to the loss of around 500 jobs, will affect a number of restaurants across the Prezzo, Mexico and Cleaver brands, as well as all 33 of restaurants under the brand Chimichanga.

Owned by private equity firm TPG Capital, the chain has also announced that the rent at 57 of the remaining sites will be reduced by between 25 per cent and 50 per cent, with the aim of reducing the group's financial difficulties to allow it to stay afloat.

The deal was originally presented to creditors as part of a form of insolvency and business restructuring known as a company voluntary arrangement (CVA). This agreement allows the chain to close all branches currently failing to turn a profit and to legally reduce the level of rent paid.

The Italian-themed food group is working alongside AlixPartners on its restructuring, which managed to secure backing from 88 per cent of creditors, including landlords, when the CVA was proposed in March.

Commenting on the decision, Prezzo boss Jon Hendry-Pickup stated that the pressures currently faced by the retail and food industries were likely to be the main factors contributing to the firm's financial worries.

"While we continue to be profitable, the pressures on our industry have been well documented," he said. "Despite this being a tough decision, the support given today by our creditors shows that they believe we have the right approach to transforming Prezzo in the eyes of teams, customers and stakeholders."

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