PizzaExpress closes further 23 restaurants as its future remains uncertain

PizzaExpress has closed a further 23 UK restaurants with discussions ongoing on a number of other sites.

 

The closures come after the chain shut 74 restaurants after entering a company voluntary arrangement (CVA) in September 2020.

 

The CVA reduced rents and gave landlords the opportunity to terminate leases until 3 December. A number of sites have already been returned to landlords.

 

Around 2,400 UK jobs were cut by the company in 2020 through a combination of voluntary and compulsory redundancies.

 

In PizzaExpress’ accounts for 2019, filed before England entered a national lockdown in January, its directors warned that coronavirus was having a "significant impact" on its business.

 

The casual dining chain has temporarily paused investment in its Future Express restaurant redesign programme, which was part of a bid to modernise its estate.

 

Its has forecast two base case scenarios for the 18 months from November 2020 to April 2022, during which it anticipates delivery sales will remain strong.

 

It predicts an improvement in dine-in sales from Q2 2021 if coronavirus rules are relaxed, though sales are still expected to be 40% below normal trading.

 

Under a second "severe but plausible scenario", where restaurants are subject to trading restrictions for much longer, sales are forecast to drop a further 15%-20% into 2022.

 

In this situation, PizzaExpress would be required to take action to protect its liquidity, including cutting capital expenditure and drawing on a £20m funding facility.

 

The directors’ report said that while the company would be able to meet its financial obligations under both scenarios its operations and liquidity could be impacted by future lockdowns. This could create uncertainty that cast significant doubt on the company’s ability to continue as a going concern.

 

“The longer that stringent measures remain on restaurant businesses, the higher the risk to the future of our business,” the report reads.

 

PizzaExpress announced two new additions to its senior team this week. Shadi Halliwell, former chief marketing officer at Three UK, is now chief marketing officer. Jo Bennett has joined as chief business officer from a role as group chief financial officer at international sleep and wellness firm Hilding Anders Group.

 

PizzaExpress was founded by Peter Boizot in London’s Soho in 1965 and has more than 370 restaurants in the UK and Ireland, and 89 internationally.

 

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