PizzaExpress has said it could close around 67 of its UK restaurants, putting up to 1,100 jobs at risk.
The chain, which also revealed it has put itself up for sale, blamed the move on the “significantly more challenging environment” caused by the coronavirus pandemic.
Highlighting the “current unprecedented backdrop” of COVID-19, bosses believe the turnaround plan will help protect the majority of staff by putting “the business on a stronger financial footing in the new socially distanced environment”.
The threat of closures, first revealed by Sky News last month, are the latest sign of the pain being felt by the hospitality industry, which has been hard hit by the public health crisis.
The chain said it plans to launch a company voluntary arrangement (CVA) restructuring deal in the near future, which could lead to the closure of 15% of its 449 UK restaurants.
However, it insisted the final outcome had “yet to be decided”.
PizzaExpress, which is majority-owned by Chinese firm Hony Capital, said it had also hired advisers from Lazard to lead the sale of the business.
The firm closed all its UK restaurants on 23 March after the government-ordered lockdown aimed at curbing the spread of infection, before starting a staged reopening of sites last month.
Customer demand has been “encouraging” since sites reopened, with 166 outlets now open across the UK, the company said.
Andy Pellington, group chief finance officer, said in a statement: “While we have had to make some very difficult decisions, none of which has been taken lightly, we are confident in the actions being taken to reduce the level of debt, create a more focused business and improve the operational performance, all of which puts us in a much stronger position.
“We can now plan to invest in both our UK&I and international businesses as well as support our teams as they return to work.”
Zoe Bowley, UK and Ireland managing director, said: “Our business has a long history of success, but the UK-wide lockdown has hit the hospitality industry particularly hard.
“While the financial restructuring is a positive step forward, at the same time we have had to make some really tough decisions.
“As a result, it is with a heavy heart that we expect to permanently close a proportion of our restaurants, losing valued team members in the process.”
She added: “As we continue to reopen our restaurants for dine-in and delivery, we will successfully navigate the extended period of social distancing expected in the months ahead and, in so doing, protect 9,000 jobs.
“The initial signs from the restaurants that have been reopened have been very encouraging and we hope that our loyal customers continue to support us now more than ever.”
It is expected the shake-up will see a “significant” reduction of the group’s external debt from £735m to £319m.
PizzaExpress also plans to sell its business in mainland China, where it has 60 restaurants.
Other restaurant operators, including the Café Rouge owner Casual Dining Group, Prezzo and Carluccio’s, have been forced by the COVID-19 crisis to call in insolvency practitioners or explore sale processes.