Pizza Express is one of the nation’s favourite Italian food chains, and was founded in 1965 in London. With more than 600 restaurants now stretching across Europe to East Asia, it has become a firm family favourite. However, this week, the chain revealed it will be preparing its financial advisors for discussions with debtors. There is a reported £1.6million of debt per restaurant. Earlier this year, the chain declared that its profits fell 7.7 percent to £32.4million during the first six months of 2019. It also announced that it intended to focus on improving current sites and the set menu, but many began to speculate that Pizza Express could end up like the collapsed high street chain Jamie’s Italian. The Italian brand was set up by Peter Boizot more than 50 years ago, after he allegedly could not find a good pizza to eat in the UK, but the chain has since changed hands multiple times over the decades.
It was bought for £15m by Luke Johnson, formerly the youngest-ever chairman for Channel 4 and a chairman Royal Society of the Arts, in partnership with entrepreneur Hugh Osmond in 1993.
The pair expanded the pizza restaurant from only 12 outlets to more than 250 in just the UK between 1993 and 1997 and increased the share price from 40p to 900p.
Mr Johnson is also known for his association with some other chains: Strada, the upscale pizza chain, and the cafe known as Patisserie Valerie – a chain which hit the headlines earlier this year for its dramatic collapse.
Mr Johnson enthusiastically expanded the cafe company’s stores when he first took over, and employed just less than 3,000 members of staff. He built Patisserie Valerie into a network of more than 200 stores after he purchased it in 2006.
It was then reported earlier this year that it crashed allegedly due to widespread accounting fraud, with the company revealing there were “thousands of false entries” in the books. He lent Patisserie Valerie £20million to avert the initial crisis but due to the suspect accounts, it appeared the company could not saved and went into administration.
Luke Johnson is a former chairman of Pizza Express
Pizza Express announced it had serious debt problems this week
In a Guardian article from January this year, journalist Sarah Butler revealed the entrepreneur has a “willingness to fail”, and even used to have a “roulette wheel” in the boardroom of his investment firm, which is called Risk Capital Partners.
In 2006, the Guardian also reported he was worth an astonishing £80million.
While Mr Johnson remained chairman of Pizza Express until selling it on in 1999, his business partner Mr Osmond left the company in 1997 to start his own business venture.
He set up his own chain of pubs called Punch Taverns in 1997.
This chain of pubs made up an eight of the UK’s licensed houses – 6,700 of Britain’s pubs in total.
Mr Johnson even joined No.10 for a business summit in 2017
However, in 2011, The Observer reported Punch Taverns had a £159million loss the previous year, and consequently had to “make interest payments on its debts of £260million”.
Reporter Andrew Clark explained: “Shares have slumped by 95% over four years amid mounting alarm that Punch could default on its debt. Top executives blame external factors – they say drinkers have been lured out of pubs by cheap lager on supermarket shelves and by the Labour government’s 2007 decision to outlaw smoking in pubs.”
When the debt climbed to £3billion, Mr Osmond had to sell the chain to Heineken for £403million.
Global private equity company Cinven bought Pizza Express for £1billion in 2006, just before the crash. It was reportedly the largest asset in the chain restaurant operator Gondola Group, which also owns Zizzi and ASK Italian.
However, the chain then lost £79million before tax and after £110million of interest payments on its £1.2billion debt.
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Peter Biozot founded Pizza Express
Pizza Express was set up in London in 1965
Pizza Express was later sold to China-based Hony Capital in exchange for £900 million in 2014, after its first ever outlet opened in Beijing.
Yet, Pizza Express has been in debt for the last two years. It made a loss of £55million last year alone, and may now go into administration although the owners have until 2021 to sort out its finances.
The original founder Mr Boizot also discovered some financial difficulties of his own after stepping down from his Pizza Express role.
When he started his business, his takings totalled £3. However, his vision soon expanded into the national brand many are keen to save from administration today.
According to a 2019 Daily Mail, Mr Boizot retired as chairman and floated the company on the stock market in 1993. He walked away with £33million – but then lost money through poor decisions in business deals, leading his estate to disappear.
Many famous faces such as former Chancellor George Osbourne visited the pizza chain
He invested in Peterborough United, and bought a variety of assets from theatre, art galleries to a hotel but did not own any property after his death.
Reporter Andrew Young revealed Mr Boizot’s sister, Clementine Allen claimed his whole estate went towards the £45,000 tax bill after his death in 2018.
Subsequently, his estate was worth £0.
She said: “Peter did what he wanted in the way he wanted to do it. I don’t think understood money and he didn’t seem to mind that he had lost money. He didn’t have any value for it, but he loved his life and he helped a lot of people.”