Carluccio’s and BrightHouse collapse as coronavirus bites

Some 4,500 high street jobs are in danger after restaurant chain Carluccio’s and BrightHouse, the rent-to-own retailer, both filed for administration.

After the Daily Mail warned that the coronavirus outbreak would “claim a series of corporate victims this week”, casual dining chain Carluccio’s became the first to go, blaming “challenging trading conditions” worsened by the pandemic.

The administrator says it is “urgently” considering options for the chain, including mothballing the company using government support, as well as trying to sell all or parts of it.

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John Colley, associate dean at Warwick Business School, said that the company’s woes may not be only due to the coronavirus outbreak.

“They over expanded, as did many other restaurant chains,” Colley said. “I think the fact that Carluccio’s was so quick to go into administration says that this was not due to coronavirus. All the issues were there anyway and this is just the last straw.”

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The BBC says that “like many in the casual dining sector” Carluccio’s “has felt the brunt of a fall in consumer spending, combined with higher business rates and increases in the National Living Wage”.

Prezzo and Byron closed restaurants last year, while Jamie’s Italian also slipped into administration.

The accountancy firm UHY Hacker Young found that the number of restaurant insolvencies last year climbed 10% to 1,500, reports the Daily Mail. The number of pubs that went bust also increased by 10%, to 500.

Meanwhile, the UK’s biggest rent-to-own operator, BrightHouse, has also collapsed, with administrators trying to salvage parts of the business.

The controversial company, which sells household appliances and electrical goods on credit to primarily low-income customers, had been struggling after deluge of compensation claims for selling to people who could not repay, says the BBC.

Grant Thornton, the joint administrators, said BrightHouse would not be making new rent-to-own or cash loan deals and that existing clients should continue to make payments in the usual way.

Julie Palmer, from corporate recovery business Begbies Traynor, said: “Coronavirus was the final nail in the coffin for BrightHouse.”