Fears Pizza Express could be next chain to go bust as it ‘brings in emergency advisers’ ahead of debt talks
PIZZA Express has reportedly hired advisers to help fix its debt bill, leading to fears it might be the next chain to go bust. The restaurant chain ended last year with a whopping £1,122.5million debt following a pre-tax loss of £55million, according to its latest annual report. This is up by £45million compared to its […]
PIZZA Express has reportedly hired advisers to help fix its debt bill, leading to fears it might be the next chain to go bust.
The restaurant chain ended last year with a whopping £1,122.5million debt following a pre-tax loss of £55million, according to its latest annual report.
This is up by £45million compared to its £1,077.4million debt pile for the previous year.
Of its £1.1billion debt bill, £465million is due to be repaid by August 2021 and another £200million a year later.
The other £467million is a loan from the parent company that doesn’t have to be repaid.
As a result, the chain has now hired financial adviser Houlihan Lokey Inc to help it prepare for talks with creditors, reports Bloomberg.
Pizza Express has been hit by increasing rates and rents, on top of a struggling high street.
It is believed that the chain can afford it debts with no store closures on the cards, although financial adviser Langton Capital wrote on Twitter that its £1.6million debt per restaurant is “not sustainable”.
While correspondent Ed Cumming wrote: “None of Pizza Express’s recent innovations has addressed three big problems: they discounted too heavily in Groupon era, kids love Nando’s, and there is better pizza for half the price at Franco Manca, Pilgrims etc.
“Can’t run 500 sites on nostalgia alone.”
Chris Field, chairman of Retail Connections and independent retail analyst, told The Sun what was once “the darling of the casual dining scene” has struggled to keep up with the changing sector.
He said: “There are too many restaurant chains out there generally, so the market is already tough.
“Add to this the squeeze on consumer spending, declining footfall on the High Street and the spiralling cost of rates and rents and even Pizza Express isn’t immune to the challenges of the current trading conditions.
“There are also a whole bunch of new kids on the block prepared to shake things up and try something new in casual dining, which has left Pizza Express behind and it may be too late to catch up.
“Food is becoming like fashion; if you don’t keep up, then you may be going down – and possibly out.”
Pizza Express was launched in London in 1965 by restaurateur Peter Boizot and in 2014 it was bought by Hony Capital, a Chinese private equity group.
Today it has over 490 restaurants across the UK and Ireland, as well as over 100 sites worldwide. Use its store locator tool to find your nearest branch.
The Sun contacted Pizza Express, which said it “doesn’t comment on speculation”.
Houlihan Lokey also declined to comment.
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It’s a tough time for restaurant chains, with celebrity chef Jamie Oliver announcing in May that his restaurant empire had collapsed and all 23 of his Jamie’s Italian restaurants would be closing.
Last year, Prezzo also confirmed it will close 94 branches affecting 1,000 staff members.
And Gourmet Burger Kitchen (GBK) announced plans to close 17 branches late last year.
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