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Cafe Rouge owner to close 91 outlets and cut 1,900 jobs

Hannah Uttley
·2-min read
Cafe Rouge
Cafe Rouge

The owner of Café Rouge and Bella Italia has collapsed into administration, leading to the permanent closure of 91 restaurants with more than 1,900 redundancies.

Casual Dining Group is the latest firm to fall victim to the coronavirus crisis in a week where 12,000 jobs have already been axed, with the high street and aviation industry bearing the brunt of the pain.

The firm - owned by private equity giant KKR - has appointed administrators at Alix Partners as it races to find a buyer, and is likely to be sold off in parts. Its estate will be reduced from 250 to 159 outlets.

The group said that given the “extreme operating environment” it was in the best interests of all stakeholders to enter administration so the company can conclude negotiations with landlords. The procedure protects firms which have run out of cash while they try to find a solution.

Most of the closures affect the Cafe Rouge and Bella Italia chains, although 11 Las Iguanas outlets, three Belgo restaurants and several sites at airports will also shut. 

James Spragg, chief executive, said: “After reviewing all our options with advisors, it became clear that we needed to take this action in order to protect the business and secure the best possible future for Casual Dining Group as we look to conclude a potential sale."

Turnaround fund Aurelius Equity Opportunities has made an offer to take over Cafe Rouge and Bella Italia, Sky News reported. 

Rival turnaround firm Endless is said to be competing with private equity investor Trispan to take control of Las Iguanas, Casual Dining's best-performing brand. 

The restaurant closures are understood to be part of an agreement with the bidders, who required a smaller estate to proceed with any transaction.

It comes as a further blow to the battered restaurant industry, which is still reeling from the announcement that Upper Crust owner SSP plans to cut 5,000 jobs while John Lewis, Harrods and Topshop owner Arcadia are preparing to lay off at least 1,200 people between them.

Clare Kennedy, of Alix Partners, said: “Our immediate priorities are to assist those whose employment has been affected by today’s announcement and to secure a sale for the group in order to protect jobs and provide the group’s much-loved brands with a sustainable platform for the future.”