Prezzo to close 100 restaurants amid high street turmoil

The restaurant chain Prezzo plans to close up to one-third of its 300 outlets across Britain, putting hundreds of jobs at risk as it joins a growing list of high street employers locked in a desperate battle to restructure their finances.

Sky News has learnt that Prezzo, which is owned by the private equity firm TPG Capital, is preparing to launch a Company Voluntary Arrangement (CVA) in the coming days in order to push through the radical overhaul.

The closure plan will affect roughly 100 Prezzo-owned outlets and involve the complete closure of its Tex-Mex chain Chimichanga, according to people close to the company.

Sources said on Wednesday that the CVA process would be unveiled "in the next few days", and would involve negotiations with landlords to secure rent reductions at many of Prezzo's remaining restaurants.

Several hundred jobs are likely to be lost as a result of the restructuring deal, although the exact figure is expected to be far lower than one-third of Prezzo's total workforce of 4,500, an insider said.

AlixPartners, the advisory firm, is overseeing the CVA.

The development is the latest bleak news to hit the UK high street on the same day that the administration of Toys R Us UK was confirmed, putting 3,000 jobs at risk.

Maplin , the electricals chain, also announced it would be following Toys R Us UK into administration on Wednesday.

Retailers and casual dining chains have been hit hard by a combination of rising costs such as the National Living Wage and Apprenticeship Levy, and the inexorable shift towards online shopping and meal delivery services.

Prezzo is the latest in a string of restaurant businesses which have been forced to seek financial assistance from creditors, following a CVA approved by creditors to Byron, the upmarket burger chain, earlier this year.

Jamie Oliver, the celebrity chef, is closing a dozen of his restaurants, also through a CVA, in a move that will involve the loss of about 450 jobs.

Barbecoa, a smaller business owned by Mr Oliver, appointed administrators last week.

Last summer, Handmade Burger Co collapsed into administration, while companies including The Restaurant Group - which owns Garfunkel's and Frankie & Benny's - have been forced to change their leadership teams in an effort to revive their fortunes.

Prezzo has been run by Jon Hendry Pickup, a former Travelodge executive, since 2016.

People close to his plans said that TPG (Taiwan OTC: 6521.TWO - news) and Prezzo's management faced a choice of taking decisive action now in an attempt to rebuild the business, or drift along with its performance dragged down by a large number of unprofitable restaurants.

TPG also owns a big stake in Poundworld, the struggling discount retailer, where it has been weighing a plan to inject up to £40m of new capital into the business.

Spokespeople for Prezzo and TPG declined to comment.