Pizza Hut Restaurants has confirmed plans to close about 29 of its 244 sites across Britain with the loss of up to 450 jobs.
The closures, fewer than originally feared, will be achieved through a company voluntary arrangement (CVA), an insolvency process that enables businesses to shed uneconomic outlets and cut rents.
The chain is understood to have resorted to a CVA in a bid to reduce its annual rent obligations of more than £20 million, which it can no longer afford in the light of rising costs and the impact of Covid-19 on the business.
It said that it was keen to keep as many of its restaurants open as possible and job losses to a minimum.
Under the terms of the proposed CVA, the group is believed to be asking its landlords to walk away from up to 29 sites, write off rent owed on some of its marginal sites and cut rents on some others for two years.
The restructuring, which is being overseen by Alvarez & Marsal, does not affect the Pizza Hut Delivery business, which is separately owned. Pizza Hut Restaurants, the brand’s dine-in business, is backed by Pricoa Capital and franchised from Yum! Brands.
A spokeswoman for the chain said: “Pizza Hut Restaurants is one of many hospitality brands that have faced significant disruption and despite a quick, Covid-safe reopening sales are not expected to fully bounce back until well into 2021.”
She said that the group was “committed to doing the right thing”, adding: “While we are likely to see 29 Hut closures and 450 job losses, any measures we take aim to protect about 5,000 jobs at our remaining 215 restaurants, as well as the longevity of the business.”
Pizza Hut is the latest in a long line of restaurant companies using CVAs to restructure, including Pizza Express, Itsu, Azzurri Group, Yo! Sushi and Wasabi.