Carluccio's and BrightHouse collapse, putting 4,500 jobs at risk

Rent-to-own lender BrightHouse and restaurant chain Carluccio’s have collapsed, it was confirmed on Monday, putting nearly 4,500 jobs at risk.

Both companies were already struggling ahead of the coronavirus pandemic, but government sanctions to control the outbreak – including shutting leisure venues and non-essential shops, and drastically curtailing the amount of time people are allowed out of their homes – were the final straw.

Carluccio’s administrator FRP said the Italian-themed chain, which has 71 restaurants, took the decision to apply for administration “after a sustained period of challenging trading conditions, which have been exacerbated by Covid-19 and the boarder issues currently facing the UK’s retail and hospitality sector.

“This meant the company faced significant cashflow pressures and as a result, was ultimately unable to meet its financial obligations as they were due.”

Grant Thornton, meanwhile, has been appointed administrator of Caversham Finance, which trades at BrightHouse. The two companies employ around 2,400 and 2,000 people respectively.

In a statement, Grant Thornton said there would be no new rent-to-own or cash loan lending, but all outstanding agreements “remain subject to the terms agreed with Caversham Finance, and customers should continue to make payments in the usual way”.

BrightHouse has around 200,000 rent-to-own customers who make monthly payments – including interest – for household appliances such as televisions and washing machines until they own the item outright. Many BrightHouse customers are on low incomes and are not eligible for credit from mainstream lenders.

In October 2017, BrightHouse – which has 240 shops – was fined £15m by the Financial Conduct Authority for failing to act as a responsible lending, after it lent money and approved rental agreements to people who could not afford the repayments. It was then hit with a wave of compensation claims for mis-selling.

FRP said it was “urgently addressing all options” for the future of Carluccio’s, including potentially mothballing the business and finding a buyer.

Partner Geoff Rowley added: “We are operating in unprecedented times and the issues currently facing the hospitality sector, following the onset of Covid-19, are well documented.”

It is thought Grant Thornton will now look to find buyers for either all or parts of BrightHouse.

The collapse of both businesses was flagged on Friday but was not confirmed until Monday.