PizzaExpress has formally launched its company voluntary agreement (CVA), which was first announced on August 4.
Included in the plan is the proposed closure of 73 of its restaurants, including the first ever branch, on Wardour Street in Soho. As many as 1,100 members of staff are in line to lose their job.
The company said the proposal to reduce its UK restaurant estate and rental cost base is intended to improve the operational performance of the business against the backdrop of a challenging trading performance, difficult market conditions caused by the COVID-19 crisis, and the effect of lockdown measures upon its restaurants.
PizzaExpress said the proposal is part of the wider holistic recapitalisation and restructuring transaction, which will significantly strengthen the Group and provide funding to deliver its future growth plan.
The chain has long been in trouble but a spokeswoman said the move has been clearly designed to sustain the business and give it longevity. She said the brand, founded in 1965, has every intention to be a high street staple in Britain for another 50 years.
Zoe Bowley, UK&I Managing Director, commented: “The announcement of the CVA proposal today follows a period of constructive dialogue with the
British Property Federation and a broad range of our landlords. We have taken onboard their feedback and accommodated their requests as far as possible.
“Unfortunately, the impact of the global pandemic has meant that we have had to make some incredibly tough decisions to safeguard PizzaExpress for the long term. Today we have confirmed that 73 of our pizzerias are proposed to close permanently. In most cases, there is another PizzaExpress 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 PizzaExpress to meet future challenges and opportunities.”
Rent is by far the biggest issue facing PizzaExpress alongside the Covid-19 pandemic.
Melanie Leech, Chief Executive, British Property Federation (BPF), commented: “These situations are never easy, particularly now for the retail, hospitality and leisure businesses on our high streets at the sharp end of the COVID-19 pandemic.
“Powners, however, need to take into consideration the impact on their investors, including the millions of people whose savings and pensions are invested in commercial property, as they vote on any CVA proposal.
“PizzaExpress and Deloitte engaged with the BPF before launching this CVA proposal. This has provided us an opportunity to improve understanding of property owners’ interests and concerns, but ultimately it will be for individual property owners to decide how they will vote on the CVA.”