Newspaper article The Journal (Newcastle, England)

Big Brands Bite Dust as High Street Toil Goes On

Newspaper article The Journal (Newcastle, England)

Big Brands Bite Dust as High Street Toil Goes On

Article excerpt

Byline: COREENA FORD Business writer @Scoopford

THE UK's embattled high street suffered more blows as two well-known names announced major closure programmes. Italian restaurant chain Carluccio's has confirmed its Metrocentre restaurant is one of 34 to close as part of a proposed company voluntary arrangement (CVA).

And Mothercare - which has three outlets in the North East - is to axe 50 underperforming stores and re-hire the chief executive it sacked just weeks ago as part of a shake-up.

The baby chain has not said yet where the closures will take place.

Carluccio's has asked landlords to agree to a series of rent reductions in the CVA, which will see a third of its 103 restaurants bring down the shutters.

It has become the latest to enlist help amid a crisis in the casual dining sector, following the likes of Jamie's Italian, Byron and Prezzo which have signed up to CVAs and announced closures.

A spokesman for Carluccio's said it has decided to close the Metrocentre restaurant, which opened less than two years ago, amid rising costs and rents.

The firm said: "While we have had to take the very difficult decision to close our Metro Gateshead site due to rising business costs and unsustainable rental levels, we remain very committed to the Newcastle and Gateshead community. "Our Carluccio's restaurant in Newcastle Grey Street is unaffected by the current restructuring process and will remain open.

"We look forward to continuing to welcome the people of surrounding areas to our restaurant, delivering Carluccio's signature all-day, Italian dining experience."

The firm has enlisted accountants KPMG to oversee the restructing of the business, which will see the company ask landlords to agree to rent reductions at 34 restaurants - a third of its UK portfolio.

The proposed supervisors of the CVA are Will Wright and Rob Croxen from KPMG's restructuring practice.

Mr Wright, the proposed supervisor of the CVA, said: "Carluccio's is a well-established and much-loved part of the UK high street.

"But like many other businesses in the casual dining sector, in recent times the company has been adversely impacted by a combination of well-documented pressures including a gradual decline in consumer spending and increasing competition, coupled with the rising costs of labour, raw materials, rent and business rates. …

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