Carluccio’s seeks private equity buyer following profit drop

Italian restaurant chain Carluccio’s is looking for a private equity buyer after appointing advisers KPMG to assess its options.

The Financial Times reported that KPMG had approached Wagamama owner Duke Street and Pret a Manger owner Bridgepoint over a possible buyout. It has also sought turnaround specialists and private equity groups.

The chain’s most recent filings showed that despite having a revenue increase of 2.7% to £140m for the year to 25 September 2016, its pre-tax profits fell sharply by 81% to £982,000 over the same period.

The news comes at a time when a number of major restaurants have been struggling, with Byron making the decision to close 20 restaurants in January and 12 closures of Jamie’s Italian.

Fellow Italian restaurants Strada and Prezzo also proposed multiple closures at the start of the year.

A private equity executive approached by KPMG told the Financial Times: “This is a desperately difficult sector due to higher business rates, wage costs increasing, difficulty to recruit staff in light of EU labour going home, higher food costs [and] overcapacity in the market following the huge number of new restaurant expansions in last three years.”