Bella Italia owner, the Casual Dining Group, has filed an intent to call in the administrators due to the financial strain caused by COVID-19 closures.
The coronavirus pandemic has had a massive impact on many businesses regardless of their size. Forced closures have led to a significant drop in profits, while expenditure has hardly changed. Although the UK government and many other governments across the world have put measures in place to aid ailing businesses, it is not enough to save every business on the high streets. One business that has been put under pressure is Bella Italia, and this chain now looks set to close.
Casual Dining Group
Bella Italia is part of the Casual Dining Group. This group also includes Las Iguanas, Café Rouge, and many more popular restaurant chains. Some of their other brands include Huxley’s, Grand Brasseries, Belgo, Oriel, and La Salle. The company was founded in 2002. They now have more than 300 restaurants across the UK and employ more than 6,000 people.
Bella Italia Owner Brings in Administrators
According to the BBC, the company has now filed an intent to appoint administrators at the High Court. Following this move, they have ten days to consider their options, which may include restructuring. They are now working closely with advisers from AlixPartners, a corporate finance firm. They are looking closely at possible restructuring solutions.
Why Has Bella Italia Landed in This Position?
A spokesperson from the company described how the unprecedented situation caused by the coronavirus pandemic has put unexpected and excessive pressure on the company. The forced closures in March 2020 have put huge financial strain on any company in the food and hospitality industries.
Why File an Intent to Appoint Administrators?
It is not certain that the Casual Dining Group will use the administrators at this stage. By filing an intent, they have the chance to try and restructure within a 10-day period. Another benefit of taking this measure is that it protects the company from threatened legal action from landlords.
If the company forms a restructuring plan before the 10-day deadline is up, they can let the notice lapse. On the other hand, if they are unable to come up with a plan, the company can request a 10-day extension or opt to bring in the administrators.
Is COVID-19 the Only Reason for the Failure of Bella Italia and Other Restaurant Chains?
While the coronavirus pandemic has had a significant impact on Bella Italia and many other restaurant chains across the UK, this is not the only reason the company is in financial difficulty.
Many restaurant chains have struggled with increasing costs. These include increased costs of imported food due to the drop in the value of the pound, rising minimum wages, and increased business rates.
Bella Italia, Café Rouge, Las Iguanas, and other Casual Dining Group chains are not the only restaurants to suffer. Jamie Oliver’s restaurant empire collapsed in 2019.
Other companies that have either closed or put emergency measures in place include Frankie & Benny’s, Chiquito, and the burger chain, Byron.