Caffè Nero is the latest high street chain to be forced to restructure its business after profits took a further hit because of the second lockdown.
The chain, which has 660 branches across the UK, has launched a Company Voluntary Arrangement (CVA) to restructure its business to avoid future closures and potential job losses.
A CVA is a legal procedure that allows companies to continue trading whilst allowing a percentage of their debts to be paid back gradually over time.
The process involves the business agreeing with its creditors, including the landlords of its stores, ways to cut costs without the whole business effectively going under.
Company Rescue describes the process as “the best rescue tool for a company that is viable going forward but is burdened by historic debt”.
Caffè Nero has expressed a desire to keep store closures and any related job losses to an absolute minimum.
The company has also claimed that it will look to redeploy any staff if stores are forced to close as a result of the CVA.
The chain is another significant high street presence to announce its desire for expert guidance in recent weeks. Caffé Nero employs about 5,000 people and claims to serve up to 135 million customers annually.
Gerry Ford, Caffè Nero’s founder, claimed that the second lockdown in England forced the business to act after profits declined further.
He added: “Like so many businesses in the hospitality sector, the pandemic has decimated trading.”
Despite performing strongly before the coronavirus pandemic, the company has suffered due to new government measures – including curbs on socialising and its advice for people to work from home.