Pizza Express draws up plans to close 75 restaurants
Pizza Express is drawing up plans to close up to 75 restaurants around the UK as the pizza chain undergoes a wide-scale financial restructure as a result of the coronavirus crisis.
The company is mulling the closure of “around 75” of its 470 UK outlets through a company voluntary arrangement (CVA), Pizza Express said today.
The final number of proposed Pizza Express closures is said to be undecided, and will depend partly on the progress of formal talks with landlords, which are expected to start next week.
The proposed closures will likely impact many hundreds in Pizza Express’ 8,000-strong UK workforce.
It comes as the restaurant group, founded in 1965, is expected to undergo a wide-scale restructure as a result of the coronavirus pandemic.
Hony Capital, the Chinese firm that acquired the restaurant chain in 2014 for £873m, is thought to be ceding control to its bondholders as part of a restructure of the group, according to the Times.
Pizza Express, which has 627 outlets in the UK and overseas, reported a 1.1 per cent increase in revenues to £548.8m in the 12 months to December.
The company is yet to publish its full 2019 accounts as a result of Covid-19 related delays, however its 2018 accounts show a pre-tax loss of £55m.
High street restaurants have continued to feel the strain of the pandemic, as footfall plummeted to record lows during lockdown and social distancing measures continue to hamper business capacity as outlets slowly reopen.
Earlier this month, Pizza Express said it would withhold rent payments for the quarter, as the firm attempts to recover from months of closure due to the lockdown.
Other restaurant chains, including Cafe Rouge and Bella Italia owner Casual Dining Group, Prezzo and burger chain Byron, have been forced to call in insolvency practitioners or explore sale processes as a result of the pandemic.
Ninety one of Casual Dining Group’s restaurant outlets closed with immediate effect earlier this month, slashing 1,900 of the firm’s 6,000 staff in the process.
Byron earlier this month filed a notice of intention to appoint administrators, in an attempt to protect it from creditors during talks with potential buyers and save upwards of 1,200 jobs.
The government last week announced it will cover half the bill for dining out in August as part of its Eat Out to Help Out scheme to encourage consumers to support the hospitality sector after the coronavirus lockdown.
Chancellor Rishi Sunak said the government will provide vouchers a 50 per cent discount for sit down meals in cafes, restaurants and pubs across the UK.
However, the move has done little to allay customer worries over the spread of the virus in enclosed spaces.
The latest survey by the Office for National Statistics published last week found that six in 10 UK adults would be uncomfortable or very uncomfortable to eat indoors at a restaurant.
Nigel Frith, senior market analyst at Ask Traders, said: “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.
“Closing 75 out of 470 restaurants within the UK doesn’t seem too 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.”
He added: “Pizza Express was struggling before the pandemic but it looks like this could be the final nail in the coffin.”
Pizza Express declined to comment.
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