Chief executive Gerry Ford said that it was now “imperative” that the business takes steps to reduce pressure, as its cafes in England were forced to close for a second time this year.
He will now turn to landlords to ask for better terms as part of a company voluntary arrangement (CVA), in a bid to slow the flow of cash away from the firm.
Ford said: “Like so many businesses in the hospitality sector, the pandemic has decimated trading, and although we had made significant progress in navigating the financial challenges of the first lockdown, the second lockdown has made it imperative that we take further action.”
Founded in 1997 by Ford, Caffe Nero runs some 800 branches in the UK, employing about 6,000 people. It has expanded into 11 countries, with a total of 1,000 cafes.
Under the second English lockdown cafes are only allowed to offer takeaway services. Under most Scottish Covid tiers, people from two households, up to a maximum of six people, can still meet inside a cafe.
Chains like Caffe Nero, which caters to many commuters and office workers, have been hard hit during the pandemic.
Will Wright and David Costley-Wood, restructuring experts from KPMG, are working on the CVA.
Wright said: “Caffe Nero is an iconic brand on the UK’s high streets with a terrifically loyal customer base.
“However, like many others across the sector, the impact of measures introduced in response to the Covid-19 pandemic has been devastating.”