28 September 2020
Pizza Hut Restaurants secures it future today as it wins a rescue bid which also includes securing 5,000 jobs.
The CVA deal which has been approved by landlords and creditors, will allow the chain to cut costs significantly. It will involve closing 29 of its underperforming restaurants and cutting rent bills for its remaining estate of 200 sites.
A spokesperson for the chain stated: ''We are delighted to have reached such a constructive position in partnership with our landlords and creditors. We appreciate the support of everyone involved and this outcome provides us with a strong platform to secure the long-term future of the business including over 5,000 jobs and over 200 restaurants. Our focus is now 'business as usual' supporting all of our team members and continuing to provide a COVID-safe restaurant experience for our guests."
9 September 2020
Further details are heard regarding Pizza Hut and the possibility of a CVA. Sky News share that the restaurant chain is planning to propose to switching over to a turnover rent model, ultimately paying its landlords based on the revenue levels of each of its 245 outlets. 29 of its UK sites are rumoured to be shut, leaving 450 jobs at risk.
29 July 2020
Pizza Hut becomes the latest restaurant chain to place a financial restructuring on its menu since it hires advisers, Alvarez & Marsal, to explore the possibility of a company voluntary arrangement (CVA).
A final decision is yet to be made but a CVA, which if taken would lead to significant job losses, is distinctly possible.
The amount of sites and jobs which may be at risk is yet to be made clear.
Currently, Pizza Hut has 244 restaurants around the UK, of which 213 will be back up and trading by 10 August, following the sudden closures it faced (as did all other UK restaurants) from the coronavirus-reactive, rolled out, government measures. It employs 5,700 people in the UK.
A spokesperson remarked:
‘’Despite government support, and entering lockdown from a place of strength, the cost of lockdown combined with reduced trading levels has had a substantial impact on the whole restaurant sector. Along with many other businesses, we are looking at ways to minimise that financial impact, while continuing to trade as usual. Whether this will require financial restructuring in the form of a CVA or otherwise is as yet undecided.’’
Due to the unprecedented Covid-19 pandemic, many causal dining chains have been forced into looking at insolvency procedures to try and secure rent cuts with landlords and do what they can to survive. Casual Dining Group, who owns Café Rouge, Azzurri Group, who owns Bella Italia and Carluccio’s have already fallen into administration. Byron, Prezzo and Itsu are among the many having to hire advisers for assistance in examining their financial positions.Pizza Express, the biggest rival of Pizza Hut, is said to be preparing for the closure of 75 outlets under a proposed CVA.
Pizza Hut trades in the UK under a franchise of its US-based owner.
Categories: What is a CVA or Company voluntary arrangement?