Cherished Italian Chain Pizza Express Says 95 Percent of Its Restaurants Are Doing Fine

Pizza Express clarifies that is not going under, again

Beloved pizza chain Pizza Express has curtailed further reports of its imminent demise with a company statement, as opposed to a cute video full of pizza puns. Responding to a story in the Daily Telegraph that claims 40 percent of its circa 470 U.K. restaurants could close, Pizza Express said: “95% of our UK&I restaurants are profitable and there are no plans for closures outside the normal course of business.” Taking 470 as a base, closing 5 percent would affect 24 restaurants, with the loss of around 550 jobs.

The Telegraph report, based on lenders’ fears about the business’s viability, references the 40 percent figure in the context of a company voluntary arrangement (CVA.) In this scenario, Pizza Express’s parent company — the debtor — would agree a plan with its creditors — here lenders and landlords, but also suppliers — to refinance the business to some extent. Because businesses in this position are invariably in financial trouble, those debts are frequently not paid off in full under the terms of the CVA, leaving the creditors out of pocket. A notable example is Jamie Oliver owing £83 million to suppliers, HSBC, and himself after his restaurant collapse. Byron Burger; Jamie’s Italian; — before Oliver’s restaurant empire collapsed entirely; Carluccio’s; and Prezzo and Chimichanga all went through CVAs.

While Pizza Express is staving it off for now, someone is going to have to take a hit on its mounting debt at some point, even if a first, significant tranche of £465 million isn’t due to be repaid before 2021. [Daily Telegraph]

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