Pizza Express ‘draws up plans to close around 75 of its 470 UK restaurants and axe hundreds of jobs’ in yet another blow to the struggling High Street
Pizza Express is planning on closing around 75 of its 470 UK restaurants, reports suggest.
The branches are facing closure as part of a financial restructuring of the business, which is one of Britain’s biggest restaurant operators.
It is the latest blow to the High Street amid the coronavirus pandemic.
The exact number of branches being closed is yet to be confirmed and could depend on the progress of talks with landlords, set to start next week.
One source told Sky News that the number could be higher or lower than 75, but is unlikely to be more than 20 per cent of the restaurant’s UK outlets.
That means as many 94 sites could be closed, impacting hundreds of jobs, with Pizza Express employing 8,000 workers in the UK.
A significant number of Pizza Express restaurants could be forced to close amid the coronavirus pandemic
The branches are facing closure as part of a financial restructuring of the business, potentially affecting hundreds of jobs
The closures would be made as part of an insolvency process called a company voluntary arrangement.
A CVA would be used by Pizza Express to cut its rent obligations across the UK.
It comes as a report suggested the company is set to be taken over by its bondholders, as the high street chain struggles with the loss of revenues during the coronavirus pandemic.
The chain’s Chinese owner, Hony Capital, could lose control of the company as part of a restructuring.
Hony bought Pizza Express in 2014 in a £900m deal, its first branch opened in Beijing.
The investment manager had hoped to drive the growth of Pizza Express in China.
However, the chain has struggled, particularly in the UK, with the casual dining sector under intense pressure even before the pandemic.
Talks over debt restructuring began in October.
The popular restaurant is thought to have struggled with rising costs and a tough UK trading environment.
Pizza Express has been instructed to pay £465 million in secured bonds by August 2021. Its next repayment for £200 million in unsecured notes is due to be repaid by the following year.
In the second quarter of the year, the company’s earnings fell 11 per cent, while its debt rose 7.9 times before tax and earnings, compared to 6.6 times just a year earlier.
Nigel Frith, a senior market analyst, told Mail Online: “At a time where restaurants are supposed to be coming out of lockdown and taking part in the Eat Out To Help Out scheme, it’s a shame to still see yet another chain axing jobs within the hospitality trade.
‘This constant flow of unemployment within the hospitality industry is continuing to rise and rise and it’s not surprising if there are hardly any restaurants left after the pandemic. It will be interesting to see if closing 75 stores will do any good for the chain – August might be the decider for Pizza Express
‘Closing 75 out of 470 restaurants within the UK doesn’t seem to much in the grand scheme of things, but when it comes to employees being out of work – the hospitality trade is hardly recruiting at this moment in time, for all we know it could be a lot more stores than we think.
‘Pizza Express was struggling before the pandemic but it looks like this could be the final nail in the coffin.’
Pizza Express has a whole range of foods which it markets across UK supermarkets including pizza, dough balls and other dishes inspired by its menus.
The brand has around 600 restaurants across the UK and Ireland, and if these close, hundreds of thousands of workers could be out of a job.
Despite the bleak outlook for the UK, the brand’s international sales seem to have taken off and the company saw sales rise by 11.5 per cent in international markets.
This is while it is also planning to trial new menus and is also looking at improving its international remit, which now accounts for over 20 per cent of the group’s revenues.