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Sun 15th Mar 2020 - Carluccio’s to seek three-month rent holiday as operators ramp up talks with landlords over coronavirus impact
Carluccio’s to seek three-month rent holiday as operators ramp up talks with landlords over coronavirus impact: Carluccio’s, the Mark Jones-led chain, is to write to the landlords of its circa 70-strong estate to seek a three-month rent holiday in an attempt to mitigate some of the impact of coronavirus on the business, Propel has learned. It is understood Carluccio’s will send a letter to individual landlords setting out the trading performance of each respective restaurant and the impact coronavirus has had so far and subsequently could have. It will ask each landlord to grant a three-month rent holiday over what it believes will be the “most intense period” for the business in terms of losing trade and the increasing possibility of closures. The company is also set to take up the option of HM Revenue & Custom’s “Time to Pay” service, which is being scaled up by the government. It is also believed to be seeking talks with local authorities about the possibility of back-dating its business rates. The fear is if the situation worsens and it can’t pay the first installment, it could trigger a request for payment in full for the whole year. On the back of the decision to close schools in Ireland, Propel understands the brand’s restaurants in Dawson Street in Dublin and Glasthule Road in Dun Laoghaire have seen an 80% drop in trade, while some of its sites in London have experienced a circa 40% decline. Earlier this month, Carluccio’s chief executive Jones told Propel he was meeting with his management team every 48 hours to discuss measured responses to the situation. This is now believed to be a daily meeting. He said: “First and foremost, we want to do everything to protect our staff and customers so we’ll follow government advice on how we do that, for example supporting employees in self-isolation. Secondly, we will model situations in travel hubs and enclosed shopping centres, for example, where we could see a huge drop in footfall that jeopardises trading. We would have to consider temporary closure in those circumstances and staff redeployment.” At the same time, The Sunday Times reported David Page, chairman of Fulham Shore, the listed owner of Franco Manca, said some landlords had given it permission to defer rent until later in the year, while Steve Holmes, chief executive of ASK and Zizzi operator Azzurri Group, will open talks with landlords this week. A chief executive of a leading national restaurant business told Propel trading across his estate had taken “a very sharp downward turn”. He said: “The issue is big and small businesses are affected proportionately the same. As a larger business we might have bigger cash buffers but the revenue impact is also bigger. As such I suspect we would run out of cash at much the same time as a smaller business. Offering rate freezes for smaller businesses only completely misses the point. In fact, it is very dangerous as it creates an imbalance between businesses, which is anti-competitive. At the very least government needs to offer support by freezing payments to HMRC and working with clearing banks to encourage them to offer support so we can pay wages and suppliers. Landlords will need to be flexible too. If not, we will see a lot of casualties and job losses.” At the same time, delivery app Deliveroo has told Propel it is keeping its support for restaurants in the UK under review. This comes as Grubhub announced it would temporarily suspend collection of up to $100m in commission payments from impacted independent restaurants in the US in response to the impact of coronavirus.


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