Restaurant group PizzaExpress may shut nearly 15 percent of its UK restaurants and cut 1,100 jobs, as part of a restructuring intended to cut debt and respond to the challenges posed by the CCP virus pandemic.
The company, which operates 449 restaurants in the UK and is currently owned by Chinese private equity firm Hony Capital, said it had started a sale process to find a new owner.
Part of the plans involve the divestment of the group’s mainland China business, where it operates 60 restaurants.
The UK hospitality sector has been hit hard by the lockdown measures imposed to curb the spread of the CCP (Chinese Communist Party) virus, commonly known as the novel coronavirus.
All of PizzaExpress’s UK restaurants were closed on March 23 during the national lockdown. Only 166 have thus far reopened, the group said.
A deal reached with its secured creditors and its majority shareholder Hony Capital includes reducing the company’s external debt from 735 million pounds ($955.98 million) to 319 million pounds ($414.91 million), and a provision of up to £144 million for the future development of the business, £70 million of which will be available to support the re-opening of PizzaExpress restaurants in the UK.
The restructuring may result in the permanent closure of around 15 percent of its outlets, with up to 1,100 jobs at risk, the group said in a statement.
“This decision is a very difficult one,” the group said, but “against the current unprecedented backdrop, PizzaExpress believes reducing the size of its estate will help it to protect 9,000 jobs.”
The company said it will look for redeployment opportunities both internally and externally for those employees impacted, and will also offer outplacement support.
Founded by Peter Boizot in Soho in 1965, PizzaExpress now has over 600 restaurants globally, including 24 in Hong Kong, 6 in Singapore, and 14 in the United Arab Emirates.
To help struggling restaurants to get back on their feet, the UK government launched a scheme called “Eat Out to Help Out” on Aug. 3.
Under the scheme, up to 10 pounds ($13) of a customer’s restaurant bill will be paid by the government if you eat out on a Monday, Tuesday, or Wednesday at participating venues throughout August.
Reuters contributed to this report.