Pizza Express, one of the most famous brands of the UK, is ready to receive a lifeline of £ 30 million from its shareholders, according to reports from Sky News.
Bain Capital, the private equity company, is supposed to lead the financing to ensure that the company can refinance its £ 335 million bond for reimbursement next year. The deal has yet to be completed and Cyrus Capital Partners, another large bond holder of the restructuring of Pizza Express, can also play a role.
The investment comes when the restaurant chain, which operates around 350 VK and Irish points of sale, is confronted with a challenging environment. The industry is braced for extra cost pressure when the payments of national insurance in April increase, together with a higher minimum wage. Hospitality leaders warn that these changes can curb investments and exert further upward pressure on menu prices – a concern in view of the fact that consumers have already steadily increased costs in recent years.
The recent history of Pizza Express is determined by ownership changes and heavy debts. Although the explosive success from the nineties in the early 2000s saw, a series of acquisitions lodged it with a debt stack of £ 1.1 billion. It is said that interest costs reached £ 93 million a year, which contributed to a loss before taxes of £ 350 million in 2019.
Since then, the chain has closed dozens of restaurants, a reduced workforce and started a renovation to recapture the atmosphere of his heyday. The last publicly available figures show that the turnover increased to £ 367 million in 2023, although the company has still posted a loss before taxes of £ 6.4 million.
Research by CGA indicates that the turnover at the top British hospitality companies in January was 1.3% lower year after year. Rising costs, supply chain pressure and changing consumer habits have combined to weigh the sector. More restaurants can be forced to increase the prices to absorb new labor costs, making it possible to test the willingness of customers to keep dining.
In the meantime, the ambitions of Pizza Express for expansion or acquisition – it considered to take over the restaurant group (parent of Wagamama) in 2023, but withdrew – can be limited by the headwind of the market. The company hopes that new investment and a continuous refresh of the image will promote resilience against a rapidly evolving casual-dining landscape.
Neither Bain Capital nor Pizza Express have commented on the reported deal, but if the financing package is agreed, it can secure the position of the brand if it navigates the prospect of higher taxes and operating costs in the coming months.