Pizza Express - where did it all go wrong?

Pizza Express is reportedly at risk of collapse, as the firm brings in advisors ahead of talks with creditors.

The casual dining chain, which was acquired by Chinese private equity firm Hony Capital in 2014, has a reported debt pile of £1.1bn. The debt is the equivalent of £1.6m per restaurant, with more than 470 branches across the country.

The company, a high-street presence for 54 years, has until August 2022 to repay £655.6m of its debt. This could prove tricky, after profits fell 7.7% in the first half of the year.

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According to reports, bosses are in talks to refinance two tranches of borrowing worth a combined £665m. The Guardian says the chain is preparing for painful debt restructuring, amid fears it could “go the way of restaurant chains such as Jamie’s Italian”, which folded earlier this year.

Where did it all go wrong?

The company’s deterioration is part of a broader decline in the casual dining sector. However, some analysts have said that Pizza Express has been too generous with its discounts and deals.

“The cheesy aficionados of Pizza Express have clearly been giving away too many 2-for-1, 3-courses-for-£12 discount codes,” writes HuffPost’s Kate Leaver.

Writer Ed Cumming argues on Twitter that “none of Pizza Express’s recent innovations has addressed three big problems: they discounted too heavily in Groupon era, kids love Nando’s, and there is better pizza for half the price at Franco Manca, Pilgrims etc”. He added that the chain “can’t run 500 sites on nostalgia alone”.

A source insisted the company is not in danger of collapse and was also unlikely to pursue a company voluntary arrangement like those agreed by rival chains Prezzo and Carluccio’s.

Either way, the headlines are a blow to the once-strong chain, which seems a staple of so many British high streets. Just last month it was voted the UK’s favourite casual restaurant brand in a YouGov poll.