Hony Capital-backed restaurant chain PizzaExpress has decided to permanently shut 73 outlets due to coronavirus lockdowns and higher costs, the company said in a statement. The chain, which has about 470 sites in the UK, expects the move to lead to the loss of about 1,100 jobs.
PizzaExpress said rental costs have become unsustainable and launched a company voluntary arrangement (CVA) to improve its finances by cutting rental agreements and temporarily moving from quarterly to monthly rents.
It also stated that earnings across the PizzaExpress estate have been declining over the past three years, although most of its restaurants were profitable before lockdown was implemented in March.
“Hard as this process is, it will protect the jobs of over 9,000 of our colleagues and provide a strong footing for PizzaExpress to meet future challenges and opportunities,” Zoe Bowley, UK & Ireland managing director, noted in a statement.
Earlier this month, the pizza chain, which has been majority-owned by Chinese firm Hony Capital since 2014, said it had placed the business up for sale.
The group joins a long list of private equity-backed businesses in the hospitality sector severely affected by the pandemic in the UK.
Last month, restaurant chain Bistrot Pierre, held by private equity firm Livingbridge, was sold out of administration in a pre-pack deal, which will result in 123 redundancies and the closure of six sites.
In June, Byron Burger, which was owned by Three Hills Capital Partners, was also sold to Calverton UK after filing a notice to appoint administrators.
Similarly, Casual Dining Group, formerly owned by KKR, has been struggling financially since May and recently announced its acquisition by private equity firm Epiris.
Source: Reuters
