Pizza Hut has reportedly started restructuring talks with financial advisors in a move which could place hundreds of the chain’s branches at risk.
The restaurant brand has hired advisors at Alvarez & Marsal to examine the possibility of an insolvency agreement, which could result in thousands of job losses, reports Sky News.
‘A distinct possibility’ of insolvency
According to Sky, sources have said that a final decision on an agreement has yet to be made, but a company voluntary arrangement (CVA) was a “distinct possibility.”
If the chain does enter insolvency, it is not yet clear how many of its branches will be affected, or how many jobs may be cut as part of any restructuring plans.
At present, Pizza Hut has 5,700 employees in the UK and 244 branches in total. A total of 213 of its restaurants will have reopened to customers by 10 August, with the remainder to open as soon as possible after, the company said on 29 July.
In a statement, a spokesperson for the company said, "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."
The move will not affect its 380 Pizza Hut delivery branches in the UK, which are separately owned to Pizza Hut Restaurants.