Pizza Hut’s landlords have agreed to reduce rents on its restaurants after voting through an insolvency process known as a Company Voluntary Arrangement (CVA), the company confirmed.
Landlords and creditors voted in favour of the CVA, which will see them take a cut on future bills to keep the company from going bust.
The deal means 29 Pizza Hut restaurants will shut, with 450 jobs at risk, while a further 215 will keep trading, saving 5,000 jobs. Takeaways are not affected.
If a vote had not passed, the chain could have collapsed without extra funding – a CVA can only be granted by the courts if a company can show it will face administration without the support.
A Pizza Hut Restaurants spokesperson said: “The Company Voluntary Arrangement (CVA) for Pizza Hut Restaurants, (PHR – the UK dine-in franchise business of the global Pizza Hut brand), is now approved.
“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 5000 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.”
Pizza Hut is the latest restaurant chain to attempt to push through site closures, with Pizza Express, Wahaca, Wasabi, Byron and Yo! Sushi all using the CVA process.
Retailers have also relied on the form of insolvency, including New Look, which has signed rental agreements based on sales, rather than a fixed amount.
Earlier this month, Pizza Hut said it put forward the CVA proposals as “sales are not expected to fully bounce back until well into 2021” despite a quick and safe reopening of sites.
Retail and hospitality landlords have come under immense pressure in recent months, following a raft of high profile CVAs, while some chains have also held off quarterly rent payments.
However, landlords and creditors have continued to vote favourably on CVAs, preferring to secure agreements based on lower rents than risk pushing retailers or restaurant chains towards more severe insolvency processes by rejecting proposals.
Rival Pizza Express confirmed this month that it will shut 73 restaurants with 1,100 job losses after its own CVA deal was approved by creditors.
List of Pizza Hut stores expected to close following Monday’s CVA result:
– Basingstoke Retail Park
– Brighton City Centre
– Bury St Edmunds
– Cambridge, Regent Street
– Cardiff, Culverhouse Cross
– Chelmsford, Moulsham Street
– Croydon, North End
– Glasgow, Great Western Retail Park
– Huddersfield, John William Street
– Leicester, Haymarket
– London, Leyton Mill
– London, Stratford
– Plymouth Royal Parade
– Sheffield, High Street
– Sheffield, Penistone Road
– Thornton Cleveleys