One of Britain’s most loved restaurant chains, Pizza Express, faces an uncertain future. Bloomberg reports that the company is has appointed advisors ahead of talks with those it owes money. Langton Capital this morning said that the company currently had £1.6 million debt per restaurant. Pizza Express currently operates 320 across the U.K., with a further 61 oversees. Langton announced that this was “not sustainable.”
Bloomberg says that Pizza Express Ltd. has appointed the services of financial adviser Houlihan Lokey Inc. “to prepare for debt talks with its creditors amid tough trading conditions for U.K. restaurant chains.” As in the case of other high-profile chain restaurant restructuring — see Jamie’s Italian, Carluccio’s, Prezzo, and others — this principally involves first reaching an agreement with landlords and persuading its creditors — parties to which the restaurant group is in debt — to agree to the closure of a number of loss-making locations.
Bloomberg adds that Pizza Express has been “struggling with its core U.K. market at a time when it was expanding in China following its acquisition by private equity firm Hony Capital in 2014.”
The company’s revenue dropped by 11 percent in the second quarter of this year, while its debt rose to 7.9 times its earnings before tax (and other deductibles). That compares to a 6.6 times in the previous year.
The first Pizza Express — founded by the late Peter Boizot — opened in London in March 1965, and the company is considered as one of the original architects of what is now referred to as “casual dining” in the U.K. The original branch, which still exists on Wardour Street in Chinatown, assimilated pizza, and Italian food generally, with live jazz. It went public in 1993 and the investment which followed resulted in branches opening in cities across the country, often notable for their occupying former banks in handsome period buildings.
Sloppy Giuseppes, dough balls, and a would-be famous creamy salad dressing marked the chain as an affordable family restaurant that served decent, reliable pizza. Pizza Express precipitated the omnipresence on Britain’s high streets of Carluccio’s, Prezzo, Strada, Jamie’s Italian, and Ask Italian, and then it outlasted them all. It has been one of only a small number of high street chain restaurant groups to weather a disastrous period and avoid multiple site closures. Though that could be about to change, for reasons posited here, talk of its collapse is premature.
Nonetheless, even just the whiff of a post Pizza Express world tugged on Twitter’s nostalgic, emotional heartstrings today. Here, then, a few early elegies.
Nationalise Pizza Express— Esther Webber (@estwebber) October 7, 2019
I know I’m part of the London liberal elite now b/c everyone around me is talking about how Pizza Express is the unpretentious option, when my schoolmates would always call out anyone who went to Pizza Express over Pizza Hut as a ‘posh w*nker.’ https://t.co/f3kVaTShKf— Jane Bradley (@jane__bradley) October 7, 2019
Going to be genuinely devastated if Pizza Express folds. And not just because that would make it Calzone Express.— Sara Gibbs (@Sara_Rose_G) October 7, 2019
Will be pretty sad if Pizza Express folds - its status as a restaurant of last resort, wherever you are in the UK at essentially any time means that covering politics would be a lot more miserable without it.— Stephen Bush (@stephenkb) October 7, 2019
Pizza Express reportedly about to engage in talks with creditors. Last seen, had £1.6m of debt per restaurant. Not sustainable.— Langton Capital (@langtoncapital) October 7, 2019
Check back for more on the actual story — and future — of Pizza Express soon.