Pizza Express to close up to 70 restaurants, risking 1,100 jobs

© Provided by The Guardian Photograph: Tim Goode/PA

Another 2,000 high street workers face losing their jobs after Pizza Express said it is to close 15% of its UK restaurants and Dixons Carphone said it will get rid of 800 managers in its stores.

They are the latest big high street names to announce job cuts in the wake of the economic upheaval created by the coronavirus pandemic. The jobs blow adds to the 2,600 redundancies announced on Monday at the retail and gym chain DW Sports and tour operator Hays Travel.

Later this month Pizza Express will launch a company voluntary arrangement (CVA) – an insolvency process which allows it to exit stores and cut rents – that could result in the closure of up to 70 of its 449 UK restaurants.

“Our business has a long history of success, but the UK-wide lockdown has hit the hospitality industry particularly hard,” said Zoe Bowley, who runs Pizza Express in the UK and Ireland. “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.”

© PA Wire/PA Images A branch of Currys PC World, with a Carphone Warehouse inside, on Oxford Street, central London. (Photo by Yui Mok/PA Images via Getty Images)

Dixons Carphone said it is cutting jobs in order to create a “leaner” management structure in its stores. The retailer will axe several roles including retail manager, assistant manager and team leader and create more customer-facing jobs. The changes will result in an overall reduction of 800 roles, it said.

Mark Allsop, the chief operating officer, said it was trying to better align the shopping experience in its store and online. “We want to … create a flatter management structure and make it easy for our customers to shop with us, however they choose,” he said. “Sadly, this proposal means we have now entered into consultation with some of our store colleagues.”

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Pizza Express has been operating since 1965, when the late Peter Boizot opened the first branch in Soho, London. Over the past 50 years it has been through several private equity owners and stock exchange flotations, with the company most recently changing hands in 2014 when it was bought by Chinese private equity firm Hony Capital in a £900m deal.

The chain has become common on UK high streets, shifting more than more than £500m of dough balls and American hot pizzas a year, thanks in part its prodigious use of money-off vouchers. It employs about 11,000 people in the UK.

Gallery: Coronavirus outbreak around the world (Photo Services)

The CVA is linked to a debt-for-equity swap agreed with the company’s bondholders that reduces its debt pile from an unwieldy £735m to £319m. As part of this process Pizza Express has hoisted a for sale sign but if no buyer bids more than its secured bondholders, control of the business will pass to them, the company said.

Pizza Express said it has received a £144m injection from its existing creditors which was being used to pay for the refinancing as well as cover the costs of reopening its UK restaurants.

The Pizza Express closures come amid a shakeout in the casual dining sector that has triggered thousands of job losses and hundreds of restaurant closures. Before the pandemic these mid-market restaurants had been suffering from heavy competition, rising costs and slowing interest from diners, but having to close for several months has tested their finances to the limit and beyond.

Last week the burger chain Byron changed hands in a private equity deal that involved the closure of 31 of its 51 restaurants and 650 redundancies. In a similar vein the owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains closed 91 of its 250 outlets, shedding 1,900 jobs, ahead of its sale to the private equity firm Epirus. The owner of the Ask Italian and Zizzi pizza chains also closed 75 restaurants.

The government’s discount dining scheme, which aims to help get the country’s devastated hospitality industry back on its feet, launched on Monday with 72,000 cafes, pubs and restaurants taking part, offering diners up to £10 off their food bill.

Pizza Express said that customer demand for its pizzas had been encouraging at the initial group of 60 restaurants which reopened in early July. It now has 166 venues open and taking part in the discount scheme.

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Stay alert to stop coronavirus spreading – here is the latest government guidance. If you think you have the virus, don’t go to the GP or hospital, stay indoors and get advice online. Only call NHS 111 if you cannot cope with your symptoms at home; your condition gets worse; or your symptoms do not get better after seven days. In parts of Wales where 111 isn’t available, call NHS Direct on 0845 46 47. In Scotland anyone with symptoms is advised to self-isolate for seven days. In Northern Ireland, call your GP.

Video: Pizza Express: 1,100 jobs at risk as around 67 restaurants set to close (PA Media)

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