PIZZA Express has today announced plans to permanently close 73 of its restaurants, impacting 1,100 members of staff, as part of a major restructuring plan to shore up its finances.
The chain has formally launched a proposal to reduce its restaurant estate and rental cost base through a Company Voluntary Arrangement (CVA).
UK & Ireland managing director Zoe Bowley said the impact of the coronavirus pandemic had led to some “incredibly tough decisions to safeguard Pizza Express for the long term”.
She added: “Today we have confirmed that 73 of our pizzerias are proposed to close permanently.
“In most cases, there is another Pizza Express nearby, either already open or reopening soon, to welcome our customers. Our focus is on our people whose jobs are impacted and we will be doing everything we can either to redeploy them or to support them in finding roles elsewhere.
“Hard as this process is, it will protect the jobs of over 9,000 of our colleagues and provide a strong footing for Pizza Express to meet future challenges and opportunities.”
The company said it would seek approval of the CVA proposals from its creditors by way of a virtual meeting on September 4.
The chain has experienced a sharp decline in sales due to the coronavirus pandemic.
A CVA doesn’t mean the company has gone bust.
Instead, it allows firms that have run out of cash to look at ways to save the business, such as reducing rent rates with landlords.
n October 2019, the chain was said to be in financial difficulties after it ended the year with a whopping £1,122.5million worth of debt following a pre-tax loss of £55million.
This was up by £45million compared to its £1,077.4million debt pile for the previous year.
RETAIL STRUGGLES
Pizza Express has been hit by increasing rates and rents, and struggled to keep up with a changing casual dining sector.
The announcement comes on a bleak day for high street shops as Marks and Spencer has also announced job cuts.
M&S today confirmed plans to axe up to 7,000 workers over the next three months as it struggles in the aftermath of the coronavirus crisis.
The losses will largely be customer assistants. There are 60,000 shop floor workers currently out of a total 80,000-strong workforce.
Other roles will also be lost in M&S’ central support centre and in regional management.
The retailer hopes a “significant proportion” of the cuts will be through voluntary redundancy and early retirement, and a consultation on the losses will begin.
M&S is already axing 950 management roles as coronavirus accelerates an ongoing shake-up.
The brand’s transformation plan, called “Never the Same Again”, is being stepped up after the disruption of lockdown when the M&S Food arm stayed open but its clothing arm was hit hard.
Food sales increased by 2.5% over the past 13 weeks, according to M&S’s trading update today. But clothing sales fell by 38.5% over the same period.
Britain’s retailers are facing a double whammy of lower footfall amid the pandemic and the ongoing shift to online shopping.
Despite non-essential retailers reopening across the UK, the number of visitors to high streets and other retail destinations is still a third lower than before the pandemic.
Debenhams, for example, has laid off 2,500 staff and has put itself up for sale. It has hired advisers to look at a potential liquidation if it cannot find a buyer.Â
