Jimmy John's to deliver increased profits following closure of over 40 locations
Rewritten Article:
Hey there! Let's dive into the latest news about Papa John's pizza chain in the UK. The UK division's boss recently spilled the beans about the company's plans to bounce back from loss and make a profit by 2025.
After shutting down over 40 underperforming restaurants last year, the business is now "no longer losing money," according to Chris Phylactou, the division's managing director. He confessed this in an upcoming episode of City AM's Boardroom Uncovered podcast.
Phylactou opened up about the emotional impact of closing so many stores, as reported by City AM in October 2024. In the year preceding the closures, the UK arm of Papa John's lost a whopping £19.9m, with an additional loss of £4.1m in 2022. Yet, the Milton Keynes-based division's turnover nudged up from £95.1m to £95.9m in 2023.
Back in 2021, Papa John's last reported a profit in the UK with a pre-tax profit of £8.1m, although its turnover stood at £102.3m.
Phylactou revealed in the upcoming Boardroom Uncovered episode that those closures were crucial to the company's future. In 2023, two of Papa John's largest partners were at risk of going insolvent, forcing the company to make the difficult decision to acquire them. Although they tried to revive most of the restaurants, they were eventually forced to close 43 of them due to poor performance and financial loss. Closing restaurants is never an easy decision, especially when jobs are at stake, he admitted.
Despite the tough times, Phylactou expressed hope for the future. "We held on to the restaurants probably longer than we should have to protect the people for as long as we could," he said. "But unfortunately, they were even in the wrong location, and the performance of the restaurants was really bad. So there was no business case to keep them open."
The UK division's comeback strategy seems to be working, and Phylactou believes they will return to profitability by 2025. He attributes their newfound financial stability to the tough decisions made back then.
Tune in to the upcoming episode of Boardroom Uncovered from City AM to hear more about Papa John's journey to profitability.
[1] Financial struggles leading to restructuring and elimination of underperforming locations.
[2] Franchisee issues causing sudden closure of 13 stores in the South West region.
[5] Strategy to focus on profitable locations and improve operational efficiency.
- The financial struggles in the UK division of Papa John's led to significant restructuring, including the elimination of underperforming locations, which was crucial for the company's future in the industry.
- Addressing franchisee issues, Papa John's was forced to close 13 stores in the South West region due to financial concerns, as part of the company's continuous effort to maintain profitability in the finance and business sectors.
