Pizza Express to close 67 outlets with 1,100 jobs at risk

Pizza Express is set to close 67 of its UK restaurants, putting 1,100 jobs at risk as it fights to shore up cash after sales were hammered by the coronavirus pandemic.

The 55-year-old chain is to make sweeping cutbacks as Chinese owner Hony Capital seeks a buyer for the company, with advisers from investment bank Lazard hired to oversee an auction process.

Bosses are planning to restructure the firm using a so-called company voluntary arrangement (CVA), which would result in the closure of around 15pc of its 449 UK sites. The CVA would require approval from landlords and other creditors. Pizza Express is also seeking rent reductions as part of the insolvency procedure.

The proposals are a further blow to the beleaguered hospitality industry just a week after Byron Burger said it would close 31 of its 51 sites and axe 651 jobs. Pizza Express blamed the move on the coronavirus crisis, which it said had created a significantly more challenging trading environment.

Advisers from Houlihan Lokey and Kirkland & Ellis will oversee a restructuring of the business, with the auction run independently of these plans. Hony plans to retain ownership of Pizza Express's mainland China business.

Pizza Express was bought by Hony for £900m in 2014. It has more than 600 restaurants worldwide and employs 14,000 people – more than half in the UK.

The chain was long a household favourite popular with middle class families who flocked to its restaurants for thin crust pizzas and garlic dough balls.

But an over-ambitious expansion plan and rising costs have saddled Pizza Express with a £735m debt pile. Bosses want to reduce this debt to £319m as part of the restructuring, a move that could mean it falls into the hands of bondholders unless a buyer is found.

Bosses insisted that the restructuring plans would protect the majority of Pizza Express’s workforce, with 9,000 jobs expected to be retained.

Zoe Bowley, UK and Ireland managing director, said: “Our business has a long history of success, but the UK-wide lockdown has hit the hospitality industry particularly hard.

"While the financial restructuring is a positive step forward, at the same time we have had to make some really tough decisions. As a result, it is with a heavy heart that we expect to permanently close a proportion of our restaurants, losing valued team members in the process.

“This is incredibly sad for our Pizza Express family and we will do everything we can to support our teams at this time.”