Carluccio's has called in administrators, casting doubt on the future of its 2,000 staff and more than 70 restaurants.
The Italian restaurant chain, which was founded by chef Antonio Carluccio 20 years ago, has confirmed it appointed administration experts FRP Advisory late last week.
The chain has been struggling since the outbreak of coronavirus and it emerged earlier this month that it failed to pay its quarterly rent bill.
It is understood Carluccio's staff will still be eligible for the Coronavirus Job Retention Scheme, meaning they would get paid up to 80% of their salaries, if the company was in administration.
Geoff Rowley and Phil Reynolds, partners at FRP Advisory, have been appointed joint administrators, saying the directors decided to place the company into administration after a sustained period of challenging trading conditions, worsened by the pandemic.
As a result, the chain faced significant cash flow pressures and couldn’t meet its financial obligations..
Mr Rowley said: “We are operating in unprecedented times and the issues currently facing the hospitality sector following the onset of Covid-19 are well documented.
“In the absence of being able to continue to trade Carluccio’s, in the short term we are urgently focused on the options available to preserve the future of the business and protect its employees.
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“We welcome the latest update on the coronavirus job retention scheme and look forward to working with HMRC to access the support it provides for companies in administration and their employees.
“As this fast-moving situation progresses we will remain in regular communication with all employees and key stakeholders, and will provide a further update in due course.”
The announcement comes less than a week after Chiquito was put into administration, leading to the closure of its 61 restaurants.
Marston's and Mitchells & Butlers have also both warned they were struggling.