Italian restaurant chain Criniti's collapses into administration
Italian restaurant chain Criniti's has collapsed into voluntary administration as high overheads and low consumer spending wreak havoc on the group's bottom line.
Following a meeting on Monday, the Directors of Criniti Restaurant Group appointed Worrells Solvency and Forensic Accountants as administrators.
The Criniti Group currently operates 13 venues in Sydney, Melbourne, Perth and Brisbane.
It's expected Worrells will close the weakest performing locations as a matter of priority, with some stores to remain open.
Registered liquidator Graeme Beattie said Criniti's succumbed to the same pressures as many businesses are currently facing as household spending trends lower.
"Criniti's is a well-known, well-liked chain, but like all hospitality businesses carries high overheads and is susceptible to any weakening in retail spending," Mr Beattie said.
"With some locations in the group doing better than others, our first priority will be the preservation of value by identifying and closing the poorer performers, of which we expect there to be several.
"These will be difficult, regrettable but necessary decisions made solely because we don't believe the group as a whole can trade indefinitely while a buyer is found or some other solution is reached, perhaps via a Deed of Company Arrangement."
The majority of Criniti's restaurants have opened today for lunchtime trading, but staff have been informed that there will be impending job losses.
"There is never a good way to deliver this kind of news and we understand the shock, disappointment and trepidation felt by Criniti's loyal staff," Mr Beattie said.
"While of little consolation to affected employees, by acting quickly to stem losses we are giving remaining employees a better prospect of ongoing work and all creditors a greater chance of being paid."
Outstanding gift certificates to Criniti's restaurants may not be honoured, with Worrells due to contact affected customers later this week.