CAFFE Nero is the latest high street business to be forced into insolvency after its profits were hit by the coronavirus pandemic.
The chain, which operates 660 sites across the UK, reportedly put itself into a Company Voluntary Arrangement last night.
Gerry Ford, founder of Caffè Nero, said the company’s aim is to protect jobsCredit: Rex Features
The company employs about 5,000 peopleCredit: Alamy
A CVA is a procedure that allows companies to continue trading while allowing a proportion of its debts to be paid back over time.
It is “the best rescue tool for a company that is viable going forward but is burdened by historic debt”, according to Company Rescue.
Gerry Ford, Caffè Nero’s founder, said the second lockdown in England urged the company to act quickly after profits declined.
The company has suffered losses due to the new measures – including curbs on socialising and the Government’s advice for people to work from home.
Mr Ford said: “With our dine-in facilities now closed for a second time, we have little option but to launch this CVA to safeguard the future of our business.”
The founder added the coffee chain had been trading strongly before the Covid-19 pandemic.
But he explained: “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.”
Mr Ford, who founded Caffè Nero in 1997, has appointed leading accountants KPMG to advise on the CVA.
He also said the company’s chain was to continue to protect jobs.
Caffè Nero says it serves 135 million customers annuallyCredit: Alamy
Will Wright, head of regional restructuring at KPMG, said: “Caffe Nero is an iconic brand on the UK’s high streets with a terrifically loyal customer base.
“However, like many others across the sector, the impact of measures introduced in response to the Covid-19 pandemic has been devastating.”
The company hopes to get its finances in order, reduce its rent liabilities and exit loss-making stores.
The coffee chain has been heavily impacted by the restrictions put in place to curb the spread of coronavirus – just as its rivals have, for example Pret a Manger.
Caffè Nero employs about 5,000 people and says it serves 135 million customers annually.
The Sun has contacted Caffè Nero for comment.
The company’s profits have been heavily impacted by the coronavirus pandemicCredit: Alamy
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