Pizza Express could see its UK store estate shrink by almost a fifth if reports that it is planning to shut dozens of restaurants turn out to be correct.
The chain – one of the casual dining industry’s most prominent names – is said to be on the verge of announcing a company voluntary arrangement that would result in 75 stores being shuttered.
It would leave the business with fewer than 400 outlets.
Sources told Sky News yesterday that the final number of proposed closures has yet to be decided and is likely to depend on the outcome of talks with landlords, which are expected to begin next week.
Going down the CVA route would allow Pizza Express to reduce its rent obligations across much of its UK estate.
Even with the closures, Pizza Express will still retain its status as one of the industry’s largest restaurant operators, but any aspirations to surpass the 500-store mark could be damaged for a long time to come.
Pizza Express is one of a growing number of restaurant brands to restructure its business in the wake of Covid-19. Casual Dining Group, The Restaurant Group and Carluccio’s have all encountered financial issues over the last three months that have led to huge changes within their businesses.
Pizza Express 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.
The high street chain issued the denial after a report in the Telegraph suggested lenders feared around 40% of its 470-strong UK estate was loss-making.
“95% of our UK&I restaurants are profitable and there are no plans for closures outside the normal course of business,” the company said at the time.