Prezzo agrees rescue deal to shut 94 restaurants

Restaurant chain Prezzo has won agreement from creditors on a rescue deal that will see it close 94 of its 300 restaurants.

The company did not say how many jobs would go but it was understood around 500 were affected.

Prezzo won the backing of 88% of creditors under a Company Voluntary Arrangement (CVA) on Friday, details of which were first reported by Sky News last month.

It is the latest in a string of restaurant businesses to run into trouble, after upmarket burger chain Byron won approval for a CVA earlier this year and celebrity chef Jamie Oliver's restaurant chain said it would close dozens of its outlets.

The sector has been hit by rising staff costs and lower footfall as well as the slump in the value of the pound after the Brexit vote which pushed up ingredient costs.

Prezzo chief executive Jon Hendry-Pickup said the move was a "tough decision".

"While we continue to be profitable, the pressures on our industry have been well documented," he said.

:: More pain ahead for struggling UK restaurants

Prezzo said the 94 restaurants to close were likely to shut in April and May, and staff would be made aware as soon as they have been confirmed.

The number includes all 33 of its Tex-Mex themed Chimichanga outlets.

Prezzo added that while there would be redundancies, efforts would also be made to redeploy workers.

The plan will also see rent reductions of 25% to 50% at 57 sites.

Prezzo, which currently employs 4,500 people, is owned by the private equity firm TPG Capital.

The announcement comes at the end of a dismal week for the high street, with a profit warning from Moss Bros, tough trading at B&Q and falling profits at Next.

Meanwhile, another CVA deal has seen creditors to fashion chain New Look agree on its plan to shut 60 stores with the loss of 980 jobs.

Elsewhere, Carpetright has said it is also exploring such a deal - one that it thought likely to mean the closure of about a quarter of its 400 stores.