Written by: Keith Tully
Published: 7th October 2019
The restaurant chain PizzaExpress has entered into talks with advisors as it aims to avoid becoming the latest victim of financial pressures within the UK’s casual dining sector.
Businesses in the sector have been struggling to cope financially in recent quarters, with their costs having risen steadily and consumer habits tending towards increasing caution in terms of where and how they spend their money.
Now PizzaExpress bosses are taking advice on what they might do to address a situation that sees their business sitting more than £1 billion in debt.
There are several hundred PizzaExpress outlets across the UK, with the company’s debt pile meaning it has around £1.6 million worth of debt per restaurant.
The business was acquired by a Chinese private equity operation called Hony Capital in 2014, having opened its first restaurant in London in 1965.
With the company having to connect with its creditors to discuss its current financial situation, there are fears that the Italian food chain could soon be heading out of business or struggling to survive.
Earlier this year, the restaurant chain Jamie’s Italian, created by the celebrity chef Jamie Oliver, went into administration and saw the closure of 22 outlets across the country.
Other Italian eatery chains, including Prezzo, have been forced under financial pressures to reduce the number of restaurants they operate, while other well-known casual dining sector brands, including the burger chain Byron, have survived recent financial crises only after entering into Company Voluntary Arrangements (CVAs).
PizzaExpress is among the largest and longest-standing casual dining operations in the UK but its finances have been under pressure for some time, with its chief executive Jinlong Wang saying in a recent statement that he recognises his company has a “critical need to innovate”.
“Intense competition in the causal dining sector encourages innovation and we are constantly seeking ways to increase appeal to new and existing customers,” Mr Wang said after PizzaExpress posted profits down 7.7 per cent for the first half of this year.
“Looking ahead, whilst we expect both the UK and Ireland and International markets to remain challenging, we are confident in our ability to successfully appeal to customers and believe that we will continue to deliver a resilient performance across the remainder of 2019,” he added.
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The Bank of England has said it anticipates that rates of corporate insolvency will increase in the coming weeks following the removal of restrictions on winding up petitions.Read More