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PIZZA Express has warned that it will permanently close around 67 restaurants putting up to 1,100 jobs at risk.
The chain said it is thinking about launching a company voluntary arrangement (CVA) in the “near future” in a bid to push down its rents.
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The family favourite chain said that it faced a “significantly more challenging environment” after the coronavirus crisis.
The outcome has “yet to be decided”, Pizza Express said, but it may end in the closure of around 15 per cent of its 449 restaurants in the UK, affecting 1,100 staff.
This is a fewer than predicted last month, when sources indicated that the chain could get rid of up to 20 per cent of its portfolio.
The company added: “This decision is a very difficult one; however, against the current unprecedented backdrop, Pizza Express believes reducing the size of its estate will help it to protect 9,000 jobs.”
Job losses since June 2020
MANY firms have announced job cuts since June as a result of the coronavirus lockdown. These include:
- Shoe chain Aldo collapsed into administration with five stores permanently closed
- Victoria’s Secret plunged into administration, putting 800 jobs at risk
- Fashion chain Quiz put its shop business into administration in , putting 82 stores at risk
- British Gas owners cuts 5,000 jobs, over half of which will be in management
- Airbus announces 1,700 job losses. It expects cuts to be made by summer 2021
- TM Lewin says it will close all 66 of its UK shops, putting 600 jobs at risk
- Harveys Furniture goes into administration resulting in 240 immdiate job losses and puts another 1,000 at risk
- Upper Crust plans to make 5,000 out of its 9,000-strong workforce redundant
- EasyJet says it plans to close hubs at Stansted, Southend and Newcastle, putting 4,500 jobs at risk
- John Lewis is reported to be planning to cut jobs and permanently close department stores
- Harrods has said it is consulting on cutting 680 jobs
- Virgin Money, which owns Clydesdale and Yorkshire Bank, will cut 300 jobs
- Topshop owner Arcadia has announced plans to cut 500 office staff
- Royal Mail is expected to cut 2,000 jobs as a result of coronavirus
A CVA doesn’t mean that the company has gone bust.
Instead, it allows firms that have run out of cash to look at ways to save the business, such as reducing rent rates with landlords.
The closures would be on top of the financial restructuring plans reported last month by The Times, which will see Pizza Express’ Chinese owner Hony Capital relinquish its control to bondholders.
This would see some of the company’s debts wiped out in exchange for equity in the firm.
In October 2019, the chain was said to be in financial difficulties after it ended the year with a whopping £1,122.5million worth of debt following a pre-tax loss of £55million.
This was up by £45million compared to its £1,077.4million debt pile for the previous year.
Pizza Express has been hit by increasing rates and rents, and struggled to keep up with a changing casual dining sector.
But the devastating effect of the coronavirus crisis has created new challenges after it temporarily closed down during the government lockdown.
If the restaurant closures go ahead it will be the latest blow to the retail industry.
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