Pizza Express is considering closing 15% of its UK restaurants, which would mean the loss of 1,100 jobs.
The chain is the latest High Street outlet to undertake a restructuring of its business after trading was halted by the coronavirus pandemic.
It is poised to launch an insolvency procedure which could see 67 of its 449 outlets close.
The firm would not say which sites are affected, as the final outcome of the restructuring has “yet to be decided”.
Zoe Bowley, UK and Ireland managing director for Pizza Express, said that while the financial restructuring would be a “positive step forward”, the closures would be “incredibly sad for our Pizza Express family and we will do everything we can to support our teams at this time”.
Previously, Pizza Express has said the majority of its restaurants are profitable.
The company closed all its UK restaurants on 23 March after the government-mandated lockdown.
Restaurants were allowed to reopen in July. Pizza Express opened 60 initially and said in Tuesday’s statement that customer demand had been “encouraging” at these.
It now has 166 outlets open as the Eat Out to Help Out initiative starts, and says plans for further re-openings are well underway.
The company said the restructuring would put the business on a stronger financial footing in the new socially distanced environment.
Pizza Express has heavy debts and last year was known to have started talks to put its debts of more than £1bn on more favourable terms.
It is expected to announce a Company Voluntary Arrangement (CVA) in the near future, which is an insolvency procedure that allows a company with debt problems to reach agreement with creditors regarding payment of all, or part of its debts.
A brief history of Pizza Express
1965: Pizza Express founder, the late Peter Boizot, brought a pizza oven from Napoli and a chef from Sicily to open his first restaurant in London’s Soho.
1992: Mr Boizot grew his empire over the following almost-three decades before selling it for £15m to Hugh Osmond and Luke Johnson, the man who was – until recently – chairman of Patisserie Valerie. They floated it on the stock market the next year and ultimately sold out in 1997 when it was worth £150m.
2003: It was taken private again in a £278m deal by two private equity firms who then floated it two years later – although it lasted less than a year on the public markets before it was returned to private equity hands.
2014: It changed hands again, this time to be acquired for £900m by its current owner, Chinese private equity house Hony Capital.
2020: It has more than 600 restaurants globally: 454 in the UK, including five franchises; 19 in Ireland; 24 in Hong Kong; 6 in Singapore; 14 in UAE; 60 in China; and 49 other international sites operated by franchisees.
Andy Pellington, group chief finance officer at Pizza Express, said: “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.”
Julian Cox, partner at law firm BLM said: “Pizza Express is yet another household name that has been pushed to the brink by Covid-19.
“Whilst the government has attempted to encourage people through the doors with ‘Eat Out to Help Out’, the initiative is clearly not going to be enough to protect the sector in the long term.”