Pizza Express has reportedly hired advisors to help its debt situation, sparking fears that it could be the next chain to collapse.
According to Pizza Express’ latest annual report, the 470-store pizza chain restaurant finished last year with a £1.12bn debt after a pre-tax loss of £55m.
The pizza chain’s sales in the UK and its 150 overseas restaurants both fell last year.
About half of the interest payments are made to its owner’s private investment firm Hony, who employs 14,000 people. The Chinese company bought the Pizza Express chain from UK private equity firm Cinven in 2014.
According to Bloomberg, the group has hired advisors ahead of talks with creditors who hold £465m of debt due for repayment in 2021 and £200m due the following year. Bondholders have also reportedly hired advisers to assist them in their discussions.
Earlier this year, Pizza Express said underlying profits fell 7.7% to £32.4m in the six months to the end of June, having only opened two new branches over that period, adding its focus would be on revamping its current menu and improving existing sites.
It is feared that the company could be the next to disappear from the high street and go the way of restaurant chains such as Prezzo, who closed 94 of their restaurants last year and Jamie Oliver’s dining chain, Jamie’s Italian, who filed for insolvency in May as 23 restaurants collapsed.
Pizza Express currently has until 2021 to settle the debts. Retail Sector has contacted Pizza Express for comment.
