Pizza Express: Struggling restaurant chain prepares for debt talks with creditors

Company reported 11 per cent fall in pre-tax profit in second quarter and sharp rise in debt

The restaurant chain has been grappling with rising costs and changing consumer habits in the UK. (Wikimedia Commons)

Pizza Express has hired financial advisers to prepare for talks with creditors over its mountain of debt, according to people familiar with the matter.

The restaurant chain has been struggling in its core UK market, as costs have risen while consumer demand has fallen due to changing habits. A number of restaurants in Britain’s casual dining sector have closed sites or sought help in court to reduce rental costs.

Prezzo, a competitor of Pizza Express, shut down 94 of its restaurants last year, while Jamie Oliver’s dining chain filed for insolvency in May.

Pizza Express reported an 11 per cent fall in pre-tax profit in the second quarter and a sharp rise in its debt burden compared with a year earlier.

Both the company and Houlihan Lokey, the financial advisory firm, declined to comment.

Separately, a group of investors holding secured Pizza Express bonds – or bonds backed up with collateral – started working with Perella Weinberg Partners, an asset manager, after appointing law firm Latham & Watkins in July, said the same people.

Perella Weinberg declined to comment.

Pizza Express has £465m of secured bonds due to be repaid in August 2021 and £200m of unsecured debt due a year later.

The company is owned by Chinese private equity firm Hony Capital.

Bloomberg