Bella Italia and Cafe Rouge on brink of collapse putting 6,000 jobs on the line

18 May 2020, 18:11

Bella Italia is on the brink of collapse
Bella Italia is on the brink of collapse. Picture: PA

By Ewan Somerville

Bella Italia and Cafe Rouge are on the verge of collapse leaving thousands of jobs on the line.

The parent company of the two restaurant chains Casual Dining Group, which employs 6,000 people, has filed a notice of intent to appoint administrators at the High Court.

A CDG spokeswoman said: “As is widely acknowledged, this is an unprecedented situation for our industry and, like many other companies across the UK, the directors of Casual Dining Group are working closely with our advisers as we consider our next steps.

“These notifications are a prudent measure in light of the company's position and the wider situation.

"These notifications will also protect the company from any threatened potential legal action from landlords while we review the detail of the Government advice, and formulate a plan for the company in these difficult times."

The groups’s 250 restaurants, which also include Latin American chain Las Iguanas, have been shut for the past two months of lockdown despite Government rules allowing for a delivery service, and have furloughed most staff.

Cafe Rouge is also at risk of falling into administration
Cafe Rouge is also at risk of falling into administration. Picture: PA

It is the latest in the hospitality sector to fall victim to the virus, which has ravaged the dine-out industry which was forced to shut its doors in March.

Leaders in the sector have warned that social distancing measures around reopening will significantly affect profitability for months to come.

The Government has set out plans to reopen some restaurants, bars and cafes from July 4 at the earliest but this depends on strict tests ensuring the virus is less dangerous, including the R rate - which rose last week - staying below 1.

It is understood that a variety of arrangements are still being looked at by the Casual Dining Group, including company voluntary arrangement (CVA) restructuring deals or the administration of specific brands.

The announcement comes amid reports that troubled rival Italian chain Carluccio’s is close to a rescue deal which could save 900 jobs. Carluccio’s and its administrators FRP declined to comment.