Pizza Express has shot down claims that it is planning a raft of restaurant closures over debt fears and insisted that the majority of its branches remain profitable.
The high street chain issued the denial in response to a report in The Telegraph that lenders fear around 40% of its 470-strong UK estate is loss-making after details emerged of its £1.1 billion debt pile.
According to The Telegraph’s sources, one option under consideration by bondholders is to enter into a CVA to close stores that aren’t making money, as a number of its casual dining competitors have done in the last two years.
Any such plan would potentially put more than 150 restaurants and 3,300 jobs at risk, it suggested.
But Pizza Express retorted: “95% of our UK&I restaurants are profitable and there are no plans for closures outside the normal course of business.”
The spotlight has been shining on Pizza Express since the start of this month when it was revealed that financial advisors Houlihan Lokey had been appointed to prepare for debt talks with creditors.
The company is owned by Chinese private equity firm Hony Capital and has a £1.1 billion debt pile. The first tranche owed to bondholders, understood to be £465m, is due for repayment in 2021.
In August, Pizza Express revealed that half-year EBITDA was down 8% to £32.4m, with the group blaming “industry-wide cost pressures in the UK”.
Despite revamping its menu and strengthening delivery partnerships, like-for-like sales slipped 0.2% in the period.