The impact of the novel coronavirus pandemic on restaurants has compounded the chain’s £1.1 billion debts, which are now so extensive that any restructuring plan is likely to wipe out its current owner, private equity firm Hony Capital. Hony acquired the brand for £900 million in 2014, the latest in a succession of private equity deals that bounced the chain around while layering up debts like toppings on its Romana pizzas. £450 million of that debt is due to be repaid in bonds this time next year, but the restructure proposed plans to cut its external debt in half, with a sale process leaving the business in the power of its bondholders if no bid exceeds the value of their combined shareholding, which is currently around £660 million.
Pizza Express recently announced a reopening offer of free doughballs with any main course — probably a pizza, but ymmv — that both threw the brand back to 2005 and proved symptomatic of the strange place its troubles inhabit in the national dining psyche. Every time Pizza Express flirts with mortal peril, there is an outpouring of preemptive grief, with its omnipresent blue-and-white branding, Sloppy Guiseppes, and yes, dough balls baked in to high street restaurant-going through the 1990s and into the early 2000s, the years before a 2008 recession that both made it easier for better restaurants than Pizza Express to open more cheaply and highlighted the importance of affordable, once good chains. The reality is that it precipitated the omnipresence on Britain’s high streets of Carluccio’s, Prezzo, Strada, Jamie’s Italian, and Ask Italian and has outlasted them all in the restructuring stakes. It is going to survive.
What the national affection for Pizza Express hides is how its story, like latter day Jose Mourinho, is not a special one. Bella Italia, Cafe Rouge, Gourmet Burger Kitchen, Byron Burger, Carluccio’s, and Pizza Express are all examples of successful, small restaurant brands that have been inflated by private equity beyond a scale that their offer can withstand, creating a fragile business model that, as the “casual dining crunch” of 2018 proved, was already unsustainable, pandemic or no pandemic. COVID-19 might have quickened the pace of these collapses, but the vastly inflated business models of private equity-backed restaurant groups are the base of the problem.