High Street food chain Pizza Express is at risk of being the next eatery in the UK to collapse after the firm hired advisors ahead of talks with creditors.
The chain, which was acquired by Chinese private equity firm Hony Captial in 2014, is set to engage in talks to save the business, which is in £655 million worth of debt.
The popular restaurant is thought to have struggled with rising costs and a tough UK trading environment.
It comes just months after the UK lost Jamie’s Italian from the High Street and it is thought the Pizza Express chains are in debt of up to £1.6 million per eatery.
It is thought the Pizza Express chains are in debt of up to £1.6 million per eatery (chain in Surrey pictured above)
Langton Capital Limited tweeted out the update following the announcement on October 4, that the company had hired advisors.
Langton had previously sent out a report to clients which highlighted the amount of debt the firm was in, and how each restaurant was accumulating £1.6 million of debt.
MailOnline requested the report from Langton, which they had sent out earlier in the year to its clients.
Houlihan Lokey Inc were appointed days ago to assist the talks between Pizza Express and creditors.
MailOnline contacted both Pizza Express and Hony Capital, neither of which could be reached this afternoon.
Twitter user Quayside Whitstable said the problem for the pizza chain was the loss of the four seasons pizza
Social media user Chris Samuels says the High Street will be worse off without the popular pizza chain
Ian Dunt said it would be ‘genuinely sad’ if Pizza Express folded. And remembers meals from the chain restaurant when he was a child
And another user made a dough based joked about the pizza chain, that has struggled with rising costs and a tough trading environment
Each Pizza Express shop is individually designed depending on the local tastes of the area. Pictured: The Pizza Express in Kingston upon Thames in 2004
Sources close to the situation today said that the company ‘isn’t contemplating a Company Voluntary Agreement (CVA)’ and is neither ‘close to collapse’.
This is while a group of bond holders have also started working with the business.
Following the news that the company would enter talks with creditors, many took to social media to express their sadness at the thought of the chain collapsing.
TV presenter Jake Humphrey praised the chain for always being around when he had needed somewhere to eat with his children.
Peter Boizot opened his first Pizza Express after failing to find any Italian food in London
He said: ‘People who aren’t bothered about Pizza Express folding have never been in a town they don’t know, at 3pm, with two screaming, hungry kids & a headache…’
Many people had suggested just going to another pizza place, which many felt was something only people in more metropolitan areas were privilege to.
Writer Matt Haig tweeted: ‘Love all these native-born Londoners saying ‘plenty of other pizza places’. In most British towns Pizza Express is the best pizza restaurant. In some it is the *best* restaurant. When Newark first got one it was like a spaceship had landed. People walked around speechless.’
Others said it would be ‘genuinely sad’ if it closed and others urged people to make an effort to visit the eatery this week.
This is while some poked fun at the situation, with one user tweeting: ‘Sorry, so Pizza Express needs a bit more dough?’
This is while another claimed that it had gone wrong for the chain when it had stopped doing the four seasons pizza.
Pizza Express has been instructed to pay £465 million in secured bonds by August 2021. Its next repayment for £200 million in unsecured notes is due to be repaid by the following year.
In the second quarter of the year, the company’s earnings fell 11 per cent, while its debt rose 7.9 times before tax and earnings, compared to 6.6 times just a year earlier.
On August 28 the company filed its half year results. The group claimed it had a ‘resilient performance despite challenging trading environment’.
The figures reflect the period covering the 26 weeks before June 30 2019.
The success of its restaurants allowed the brand to expand into selling its products in supermarkets
Total sales were up just 0.5 per cent during that period.
This is while reports on Companies House suggests that that brand has a half a billion pound loan with its parent company, which is currently being paid with a 10 per cent interest rate per year.
As of the end of December 2018 the companies loans and borrowings came in at £1.13 billion.
In 2017 the company cut off Firezza Holdings Limited, which is another pizza fast food chain.
The current group chairman of Pizza Express, Jinlong Wang, said at the end of the last quarter the brand had been ‘pleased with the results’.
‘In the first half of the year, we are pleased that we have remained resilient across all our markets despite sector-wide challenges.
How one man created Pizza Express after he wanted a ‘taste of Italy’ in London
Pizza Express was founded by Peter Boizor in 1965, below is a brief history of the company and how it evolved
1965, London: Peter Boizor visited London and realised that ‘great pizza didn’t exist’ in the capital. His first restaurant was opened that year
1969: Mr Boizor wanted to change the way people ate out and introduced the Pizza Express Jazz Club, which would go on to host the likes of Amy Winehouse
1993: Mr Boizor sells the restaurant chain for a reported £33 million after it was floated on the London Stock Exchange (LSE). It also opened franchises across the UK
1995: The chain expanded into the republic of Ireland
1996: Franchises re-purchased by the company
2003: TDR Capital and Capricorn Associates buy the company and make it private again
2005: Floated again on the LSE
2007: Purchased by private equity group Cinven
2011: Firm launches a major re-brand of its UK restaurants
2014: Chinese private equity firm Hony Capital acquires the brand for £900 million
2017: Launches PizzaExpress Live, which hosts various events including showing stand up comedians
2018: Mr Boizor dies at his home in Peterborough. It is reported that he left assets of £99,050. These were reduced to nil after his liabilities were settled
2019: Employs advisors to help them undergo talks with creditors
‘At a Group level, total sales grew by 2.6 per cent and like-for-like sales were broadly flat.’
It was also stated that revenue growth was down 7.7 per cent (before tax and earnings).
The half year reported also claimed that the brand was ‘not immune’ to the ‘cautious consumer environment’ across the UK and Ireland and that it had positive sales growth of just 0.5 per cent.
It is not yet known how the news will impact the UK High Street, nor is it known whether or not the brand’s supermarket range will be pulled if the talks lead to administrative measures being taken.
Pizza Express has a whole range of foods which it markets across UK supermarkets including pizza, dough balls and other dishes inspired by its menus.
The brand has around 600 restaurants across the UK and Ireland, and if these close, hundreds of thousands of workers could be out of a job.
Despite the bleak outlook for the UK, the brand’s international sales seem to have taken off and the company saw sales rise by 11.5 per cent in international markets.
This is while it is also planning to trial new menus and is also looking at improving its international remit, which now accounts for over 20 per cent of the group’s revenues.
The news comes just under a year after the food chain’s founder Peter Boizot, died at his home in Peterborough.
Just one year before his death director Richard Paul Hodgson left the business.
Experts have now claimed that it is ‘no surprise’ that the chain could be facing financial issues.
Hospitality industry expert and partner at law firm Gordons, Simon Mydlowski, said: ‘Following news in May that Jamie’s Italian had gone into administration, it is perhaps unsurprising that another major high-street name looks to be struggling.
‘Pizza Express is seen by many as a more innovative, mainstream brand, but it is struggling with its cost base which is affecting the operating and profitability of the chain.’
How the £33m Pizza Express founder lost all his dough: Businessman who started selling pizza for two shillings a slice died almost penniless after trying to save ailing local football club
By Andrew Young
He made millions bringing authentic pizzas to Britain, but by the time of his death, businessman Peter Boizot had lost all of his money.
The Pizza Express founder, who died last December aged 89, left assets of £99,050, but the size of his net estate was reduced to nil after his liabilities were settled, probate records show.
Despite making a reported £33 million when he sold the hugely successful restaurant chain in 1993, it appears Mr Boizot lost his fortune through bad business deals – and by giving it away.
Despite making a reported £33 million when he sold the hugely successful restaurant chain in 1993, it appears Mr Boizot (pictured) lost his fortune through bad business deals – and by giving it away
His entire estate was said to have been swallowed up by a £45,000 tax bill, as well as funeral costs
A big lover of art, with a passion for design, Peter enlisted the help of friend Enzo Apicella to design a number of his restaurants. He started a trend, which continues today, designing each restaurant in its own style that’s relevant and specific to the local area
His sister Clementine Allen, 83, said his entire estate was swallowed up by a £45,000 tax bill owed on his death, as well as funeral expenses, legal fees and other debts.
Mr Boizot lost the bulk of his money by taking over and investing in his struggling local football club, Peterborough United, and buying a theatre, art galleries and a hotel.
Ms Allen, who runs her own pizza restaurant in Lancaster, said: ‘Peter did what he wanted in the way he wanted to do it.
Scott Hamilton (tenor saxophone) and Warren Vache (flugelhorn) playing live at Pizza Express in London in February 1979. In 1969, Peter started PizzaExpress Jazz Club, with the likes of Ella Fitzgerald and Amy Winehouse starring there. Ever since, music has been at the heart of the dining experience
American singer Gregory Porter performing at Pizza Express Dean Street in Soho in 2001
Fat Boys were among the celebrities to perform at Pizza Express in Kensington, London in 1985
‘I don’t think he understood money and he didn’t seem to mind that he had lost money. He didn’t have any value for it, but he loved his life and he helped a lot of people.’
Mr Boizot, who had no children and never married, lived in a rented flat in Peterborough, and did not own any property.
Peter Boizot was once the owner of his local football team, Peterborough United Football Club
He graduated from Cambridge with a history degree and spent ten years working in Europe before returning to London and opening his first pizzeria in 1965 because he could not find a proper pizza to eat in the UK.
Mr Boizot imported a pizza oven from Naples and employed an elderly Sicilian to knead dough so he could sell pizza for two shillings a slice.
The chain, which now has 500 restaurants worldwide, was sold to the China-based private equity group Hony Capital for £900 million in 2014.
Amy Winehouse celebrated her 26th birthday with dinner in Pizza Express in Marylebone in 2009
Pizza Express founder Peter Boizot attends the launch of the ‘New Generation’ in 2010. He first opened a shop in 1965
Bloodbath on the High Street: How shops in the UK went from bustling to bust
2018 saw one of the worst years for the UK High Street with retailers shutting their doors and plaguing homes across the country with many job losses.
And 2019 is heading in a similar direction with Debenhams and L.K. Bennett falling into administration.
Crisis hit brands such as House of Fraser and Marks & Spencer have been fighting to keep stores open while other retailers such as New Look pushed for a solution to stop store closures and job losses.
In 2018 nearly 85,000 retail jobs were lost in the UK as businesses continued to go bust as 1,000 retail business went into administration between January and September.
As well as this the number of retail outlets left empty was up by 4,400 in 2018 according to data from the Local Data Company.
House of Fraser (pictured above) is one of the crisis hit brands on the UK High Street
Marks & Spencer has been battling with the UK High Street and had previously struck a deal with Ocado to transform grocery shopping
Last year New Look announced it would be closing 85 stores across the UK
High Street giant Gap has also announced it will close 230 stores worldwide as its US parent company launches a massive restructuring programme.
The pressure on High Street retailers has hit an all-time high as they continue to try and keep up with the ever growing popularity of online shopping.
Online retailers are able to keep prices low as they don’t face the massive rental costs of physical stores or the staff rates.
While retailers battle the rise in online shopping they are also being forced to battle Brexit, as many supply chain routes and whether or not they will be available in a no-deal scenario have put added cost worries onto retailers as many consider stock piling their items or not importing them at all.
GAP (pictured above) also announced it was closing more than 200 stores as part of a worldwide restructuring programme
The rise in online shopping with companies such as Amazon has also put a strain on the High Street
Here are some of the big name retailers which have lost out as they face fierce competition from the rise of online shopping
Carpetright
The carpet retailer is closing 92 stores across the UK. These closures represent nearly a quarter of all UK Carpetright stores.
Toys R’ Us
The UK’s largest toy shop went into administration in February 2018, leading to an estimated 2,000 redundancies.
House of Fraser
The department store chain was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley.
Maplin
The electronics giant has gone bust, closing shops across the country and putting thousands of jobs at risk.
Mothercare
The baby and toddler chain is closing 60 shops across the UK putting up to 900 jobs at risk.
Poundworld
Poundworld announced it was going into administration on June 11 after talks with potential buyer R Capital broke down, putting 5,100 jobs at risk.
Homebase
The DIY chain set to close 42 DIY outlets shut, putting around 1,500 jobs at risk.
Marks & Spencer
The retailer announced in May it plans to close 100 stores by 2022, putting hundreds of jobs at risk.
In August stores in Northampton, Falkirk, Kettering, Newmarket, New Mersey Speke, Stockton and Walsall all ceased trading.
Orla Kiely
Orla Kiely, the Irish fashion retailer collapsed in September and closed all its stores after a slump in profits.
HMV
In December HMV entered into administration with its flagship London Oxford Street having closed earlier this year.
L.K Bennett
Fashion brand L.Bennett announced it was filing for administration on March 1, 2019. Linda Bennett sent employees an email early in the morning to inform them of the news before it hit news outlets.
Pretty Green
In March, Liam Gallagher’s Pretty Green filed a notice of intention to appoint Moorfields Advisory to handle insolvency problems across its UK stores. At the beginning of April 2019 JD Sports purchased the company, saving around 70 jobs.
Debenhams
Debenhams fell into administration in April with debts of £640million following three profits warnings last year.
The firm has 166 stores and employs 25,000 people but has announced plans for around 50 stores to close in the next two years, with 22 shutting by 2020, affecting 1,200 jobs.
Which restaurants are closing amid the high street bloodbath?
As Jamie Oliver’s restaurant group goes into administration, a host of others face closures as the high street bloodbath puts hundreds of jobs at risk.
Dining chains Giraffe and Ed’s Easy Diner revealed in March that their owner plans to close a third of the brand’s sites.
Boparan Restaurant Group (BRG) announced that a total of 27 out of its 87 restaurants would close. It bought Giraffe from Tesco in 2016 and combined it with Ed’s Easy Diner after acquiring the chain that same year.
Underlying losses of £1.6million that hit the combined entity were revealed in its most recently available annual accounts.
Giraffe (pictured) is among the casualties of the bloodbath that is sweeping the British high street
Last year, several casual dining brands closed sites amid rising costs and tougher competition.
Prezzo, Byron, Carluccio’s, Gaucho and Gourmet Burger Kitchen all shut branches.
In November, creditors of Gourmet Burger Kitchen approved a plan to close 17 of the premium burger chain’s restaurants, putting around 250 jobs at risk.
South Africa’s Famous Brands, which acquired GBK in 2016 for £120 million, has previously unveiled stinging losses at the burger chain.
The firm said in October that it would take a pre-tax impairment charge of 874 million rand (£47.2 million) due to the brand’s sustained under-performance. Also in 2018, Prezzo announced that 94 of its 300 outlets will close.
KPMG found the number of restaurants experiencing significant financial distress was 11,091 in March 2018, up 8 per cent on a year earlier.
