Struggling Pizza Express set for £30m lifeline as tax rises loom
Bain Capital, the private equity firm, is poised to pay £30m to Pizza Express as part of an attempt to secure a refinancing of its debts, Sky News said. The chain, whose parent company Wheel Topco is based in Jersey, has a £335m bond which is due for repayment next year. A deal is said to have not yet been finalised.
Bain and Cyrus Capital Partners, another private equity firm, were among a handful of bondholders that took control of the chain following a restructuring in 2020.
It comes as casual-dining chains grapple with slowing footfall and the prospect of soaring costs when increased National Insurance (NI) payments announced by the Chancellor in October kick in next month.
Hospitality bosses have warned that this, combined with an accompanying jump in the minimum wage, will lead to lower investment and risks fuelling food inflation if they are forced to pass on the higher cost of labour. There are worries about whether customers will accept higher costs after years of rising prices.
Sales at Britain's leading restaurant, pub and bar groups were by 1.3pc lower in January than they had been a year earlier, according to CGA, a data firm.
Series of ownership changes
Pizza Express runs around 350 restaurants across the UK and Ireland. Founded in 1965 in London by Peter Boizot, the chain is credited with popularising pizza in Britain, and benefited from an explosion in demand in the 1990s and early 2000s.
Over the past two decades, however, the business has undergone a series of ownership changes that has left it overextended across Britain and struggling to keep up with newer, more modern rivals. Losses at the company hit £350m in 2019 as it buckled under the weight of a £1.1bn debt pile that was reportedly costing it £93m annually.
Following a turbulent period in which it closed dozens of restaurants and slashed jobs, Pizza Express has spent recent years attempting to rejuvenate its image, refurbishing stores so they are reminiscent of its 1990s heyday and opening new restaurants in areas such as Cranleigh, Maidenhead, Cheltenham and Hackney.
Latest available accounts for the company's UK trading company Pizza Express (Restaurants) show revenues rose by more than £27m to £367m in 2023, although it fell to a pre-tax loss of £6.4m.
In 2023 Pizza Express emerged as a potential suitor for The Restaurant Group, the parent company of rival chain Wagamama, during a sale process that year, but pulled out of talks shortly after, blaming market conditions.
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