PizzaExpress considers financial position

By James McAllister

- Last updated on GMT

PizzaExpress considers financial position Coronavirus CVA

Related tags: PizzaExpress, CVA, Coronavirus

PizzaExpress could reportedly be forced to close a portion of its UK estate as a result of the growing financial pressures caused by the Coronavirus crisis.

The Mail on Sunday​ says​ it believes the casual dining chain is considering a Company Voluntary Agreement (CVA), which would allow it to exit some or all of its loss-making sites.

According to the paper, before the Coronavirus pandemic hit, fewer than ten of the chain's UK restaurants were loss-making.

However, it is understood the crisis has forced the firm to evaluate options for ensuring its future viability, and a CVA is one of several possibilities being considered. 

Responding to the reports, a PizzaExpress spokesperson told BigHospitality​: “Our priorities during the Covid-19 pandemic remain clear - to look after our teams, to protect the business for the long term and to re-open successfully when the time is right. 

"While planning for the future, we will undertake a comprehensive review of our business encompassing our restaurants, including the roll-out of Future Express, and planned digital innovations. 

"When complete, and hopefully with greater clarity around how our restaurants can re-open safely, we will take the right steps to ensure PizzaExpress’ next 55 years are as successful as the last 55 years.” 

In May last year the future viability of the brand was called into question after it posted a pre-tax loss of £55m for 2018​.

In the same filings, PizzaExpress revealed it had debts of £1.12bn, including around £400m from a loan provided by its parent company, the Chinese-owned private equity group Hony Capital.

Suggestions that the company were considering a CVA were floated in October, after it was reported that lenders feared around 40% of PizzaExpress’ UK estate was running at a loss.

However, in responding to the story at the time, a PizzaExpress spokesperson said that 95% of its UK and Ireland restaurants were profitable​, and that there were no plans at the time for closures "outside the normal course of business".

The chain did decide to close its spin-off concept Za​ in late December, after nine months of trading, but said at the time that it remained ‘committed’ to the format and would be looking to relaunch the brand this year.

PizzaExpress, which was acquired by Chinese private equity group Hony Capital in 2014, currently operates more than 600 restaurants worldwide, 470 of which are in the UK. 

Last week it was reported that the chain was planning to reopen a select number of UK sites for delivery​ by the end of this week, having closed its entire estate back in March as a result of the Coronavirus pandemic. 

Related topics: Business

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