Creditors of Italian restaurant business Prezzo have backed a restructuring plan that will see it close 94 outlets – about a third of the chain.
It is estimated the move could lead to 500 job losses. The chain, which is owned by private equity firm TPG Capital, employs about 4,500 people.
Prezzo is closing all 33 outlets of its TexMex chain Chimichanga.
Under the rescue plan, rents will be cut by between 25% and 50% at 57 sites.
The closures and rent reductions aim to repair Prezzo’s financial position and allow it to continue trading.
The deal was struck under a restructuring arrangement know as a company voluntary arrangement (CVA) – a step short of going into administration.
Jon Hendry-Pickup, chief executive of Prezzo, thanked the company’s creditors and landlords for their support.
He said: “While we continue to be profitable, the pressures on our industry have been well documented. Despite this being a tough decision, the support given today by our creditors shows that they believe we have the right approach to transforming Prezzo in the eyes of teams, customers and stakeholders.”
The restaurants identified for closure are likely to close in April and May. Prezzo said that staff would be made aware of the exact dates as soon as they had been confirmed.
Prezzo was bought by TPG in 2014 for just over £300m.
It is the latest of a number of restaurant chains to run into difficulties.
Burger chain Byron and Jamie’s Italian have both had to undergo similar restructurings this year, agreeing rescue plans with their lenders and landlords, and closing restaurants.
The wider retail market is also suffering. The UK arm of toy retailer Toys R Us and electronics chain Maplin both recently collapsed into administration.
Businesses on the High Street are facing a tough environment. Wage growth has not kept up with inflation, which has hit the spending power of shoppers.
Business costs such as the National Living Wage are going up, and business rates will rise for many firms in April. Companies are also facing increasing competition from online retailers.