Carluccio's to close up to 30 restaurants putting 500 jobs at risk

The restaurant sector has been over-saturated, one lender said, with the result that some brands are now struggling to compete

The Italian chain is trying to restructure

Carluccio’s is set to close 30 restaurants, putting 500 jobs at risk, as it attempts to restructure.

The Italian chain is using a company voluntary agreement to try and stay in business - a CVA allows a firm to continue trading while dealing with debts- with 91 per cent of its creditors voting to approve the plan on Thursday.

Mark Jones, chief executive of Carluccio's, said: "I would like to thank our landlords for their support. We now look forward to a positive future and the on-going development of the Carluccio's business and of course our passionate people."

Will Wright, restructuring partner at KPMG and joint supervisor of the CVA, said: "This is an important step forward for the business, allowing Carluccio's to complete its financial restructuring plan and embark on a comprehensive operational transformation programme."

The hospitality sector has come under strain over the past few months, with burger brand Byron, and Italian-style chains Jamie’s Italian, Prezzo and Strada all facing financial difficulties.

Byron was forced to close several branches, while a third of Jamie’s Italian locations were shut down.

Research from lending platform Lendy found that market saturation is a “key reason why many leading chains as well as independents are struggling” - figures showed the number of restaurants in England has increased by 13 per cent since the recession.

Liam Brooke, co-founder of the firm, said: “In the last few years, appetite for new restaurant openings has seemed insatiable.

“Now we are seeing a period of adjustment where many well-known brands are restructuring their businesses and re-evaluating their strategies and many independents are struggling to compete.”

The downturn in the casual dining market echoes similar tough times on the high street, as retailers face falling consumer spending. Last month, retail sales showed their biggest decline since records began in 1995, with economists blaming the dip on households struggling to cope with continued austerity.

Additional reporting by newswires