Cafe Rouge and Strada deal sparks job fears

Unions representing the thousands of staff working in the Café Rouge, Strada and Bella Italia restaurant chains have expressed their concerns at reports that the company's owner was preparing a major restructuring of the business.

It was suggested that the debt-laden Tragus Group was planning to break up its business and sell Strada, the Italian chain that struggled as customers tightened their belts through the recession.

Dave Turnbull a regional officer for the Unite union, said: “We would be extremely concerned if this led to any workers being laid off, particularly as most of the staff are on minimum wage and would therefore receive very little in redundancy payments.”

The company employs about 7,000 workers across the country, making it one of the biggest employers in the leisure sector.

Restaurant industry executives pointed out that it might not be easy to find buyers for Strada at a time when other restaurant chains, such as PizzaExpress, are already seeking new owners. Tragus has hired the restructuring specialist Zolfo Cooper to advise it on its options

Pre-tax losses at the restaurants operator nearly doubled to £36m in the 12 months to 2 June last year - the latest trading period for which results have been publicly disclosed.

Tragus was formerly owned by Blackstone, the US private equity giant, but was taken over this year by lenders led by Apollo Management.