Linklaters study shows restaurant groups such as Prezzo have resorted to CVAs to close outlets. Credit: Betty Longbottom.

Data analysis by global law firm Linklaters has shown that the number of restaurants in financial distress increased by 143% in the last six months.

The study also found that restaurants filed 12 CVAs during the first quarter of this year, compared to 17 CVAs filed last year.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

Restaurant groups such as Byron, Carluccio’s and Prezzo have resorted to CVAs to close outlets this year.

“Owners are looking at where they can reduce costs to put the business on a more sustainable footing.”

Linklaters restructuring and insolvency partner Richard Hodgson said: “The sector has been faced with a number of issues that have caused a stranglehold.

“First, there’s oversaturation in the market. A number of chains expanded rapidly to the point that supply has raced ahead of demand. Couple that with increased food prices, staff costs and business rates, owners are looking at where they can reduce costs to put the business on a more sustainable footing.”

The research also states that the CVAs assisted businesses to recover affected property companies.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Linklaters real estate partner Simon Price said: “When used successfully, CVAs can lead to businesses being saved and therefore fewer property vacancies.

“However, their use has become much more wide-spread and is therefore having a more significant impact on landlords than was maybe originally conceived. As a result, we have seen some resistance and pressure from a number of landlords this year, calling for the government to reform the system.”