The company which employs 6000 people said it was undertaking the proposal to “better manage” its fixed costs moving forward in the future. The announcement confirms speculation since October that the chain was considering the launch of a CVA as the pandemic took a toll on its earnings.
Gerry Ford, founder and group CEO stated that prior to Covid-19, the business had been “trading strongly”, and had achieved 83 consecutive quarters of sales growth, however, he said like so many businesses in the hospitality sector, the pandemic “decimated trading.”
Ford went on to state that the CVA was a necessary option “to safeguard the future of the business.”
Caffe Nero has not confirmed whether it will make permanent job cuts or shutter any of its 800 UK stores for good.
Will Wright and David Costley-Wood from KPMG’s restructuring practice, who previously worked with the company to negotiate rent prices are the proposed nominees of the CVA.
Wright, head of regional restructuring at KPMG, said: “Caffè 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.
In putting forward this CVA proposal, the directors have worked hard to strike a fair compromise with stakeholders to provide the flexibility the business urgently needs to get it through the pandemic.”