Pizza Express said on Tuesday that a sweeping restructuring process could lead to it closing around 67 of its UK restaurants, putting up to 1,100 jobs at risk.
The chain said that it expected to launch a company voluntary arrangement (CVA) process, which would allow it to negotiate its debts and potentially reduce its rents, in the “near future.”
The company cited the “significantly more challenging environment” caused by the coronavirus pandemic, which forced it to close all of its restaurants on 23 March.
Pizza Express said that, while the outcome of the CVA process had yet to be determined, the move may result in the closure of 15% of its 449 restaurants across the country — or around 67 restaurants.
“This decision is a very difficult one; however, against the current unprecedented backdrop, Pizza Express believes reducing the size of its estate will help it to protect 9,000 jobs,” it said in a statement.
UK and Ireland managing director Zoe Bowley said that UK-wide coronavirus restrictions had hit the hospitality industry “particularly hard.”
“As a result, it is with a heavy heart that we expect to permanently close a proportion of our restaurants, losing valued team members in the process,” Bowley said.
The company had already been struggling under the weight of a £1.1bn ($1.4bn) debt pile, with interest payments on its loans more than offsetting its operating profits.
Pizza Express said that it had also hired advisers from financial advisory firm Lazard to conduct a sale process for the business.
The company is now owned by Chinese private investment firm Hony, which acquired it in 2014 from UK private equity firm Cinven.
“While we have had to make some very difficult decisions, none of which has been taken lightly, we are confident in the actions being taken to reduce the level of debt, create a more focused business and improve the operational performance, all of which puts us in a much stronger position,” said Andy Pellington, the company’s group chief finance officer.
The news comes in spite of the rollout of the government’s landmark Eat Out to Help Out scheme, which will see the Treasury pay up to 50% of a customer’s bill at participating restaurants this month.
Pizza Express is one of the more than 72,000 businesses that have signed up to take part in the scheme. Independent eateries and well-known restaurants such as Nando’s and Costa Coffee are also taking part.
The discount, which aims to “keep more money in hardworking families’ pockets,” applies to all food and non-alcoholic drinks, with a maximum discount of £10 per person, saving a family of four up to £40.
Anyone visiting a participating restaurant, café or pub on Mondays, Tuesdays and Wednesdays in August is eligible to receive the half-price discount.