The operator of nearly 150 Pizza Hut restaurants in the UK is in advanced talks with potential buyers as it races to wrap up a deal to secure its future.

Sky News has learnt that Heart With Smart (HWS), the US-owned brand’s biggest UK franchisee, is aiming to select a preferred bidder in January after weeks of talks with suitors.

Sources close to the process said a range of trade and financial buyers had expressed interest in acquiring a large stake in the dine-in chain.

In November, Sky News revealed that HWS had begun approaching potential bidders as it sought to mitigate the impact of tax hikes announced in the previous month’s Budget.

HWS, which operates roughly 140 Pizza Hut restaurants, is working with Interpath Advisory on the process.

The company, which was previously called Pizza Hut Restaurants, employs about 3,000 people, making it one of the most significant operators in Britain’s casual dining industry.

It is owned by a combination of Pricoa and the company’s management, led by chief executive Jens Hofma.

They led a management buyout reportedly worth £100m in 2018, with the business having previously been owned by Rutland Partners, a private equity firm.

HWS licenses the Pizza Hut name from Yum! Brands, the American food giant which also owns KFC.

Insiders told Sky News last month that the increases to the national living wage and employers’ national insurance contributions (NICs) unveiled in the budget by Rachel Reeves, the chancellor, would add approximately £4m to HWS’s annual costs – equivalent to more than half of last year’s earnings before interest, tax, depreciation and amortisation.

The structure of a takeover or capital injection was unclear on Monday, although the last eight weeks have seen a string of bleak warnings from the hospitality industry.

Even before the budget, restaurant operators were feeling significant pressure, with TGI Fridays collapsing into administration before being sold to a consortium of Breal Capital and Calveton.

Sky News also revealed during the autumn that Pizza Express had hired investment bankers to advise on a debt refinancing.

HWS operates all of Pizza Hut’s dine-in restaurants in Britain, but has no involvement with its large number of delivery outlets, which are run by individual franchisees.

Read more from Sky News:
Oxford herbicide spinout Moa seeds $40m funding round
Electric cargo bike firm seeks delivery of new backers

Accounts filed at Companies House for HWS4 for the period from 5 December 2022 to 3 December 2023 show that it completed a restructuring of its debt under which its lenders agreed to suspend repayments of some of its borrowings until November next year.

The terms of the same facilities were also extended to September 2027, while it also signed a new 10-year Pizza Hut franchise agreement with Yum Brands which expires in 2032.

“Whilst market conditions have improved noticeably since 2022, consumers remain challenged by higher-than-average levels of inflation, high mortgage costs and slow growth in the economy,” the accounts said.

It added: “The costs of business remain challenging.”

Pizza Hut opened its first UK restaurant in the early 1970s and expanded rapidly over the following 15 years.

In 2020, the company announced that it was closing dozens of restaurants, with the loss of hundreds of jobs, through a company voluntary arrangement (CVA).

At that time, it operated more than 240 sites across the UK.

HWS declined to comment.

Almost 170,000 retail workers lost their jobs this year after the collapse of major high street chains, according to data.

It is the highest since more than 200,000 jobs in the sector were lost in 2020 in the aftermath of the COVID pandemic, which forced retailers to shut their stores during lockdowns.

The figures, compiled by the Centre for Retail Research, show a total of 169,395 retail jobs were lost in the 2024 calendar year to date – up 49,990 – an increase of 41.9% – compared with 2023.

It said its latest analysis showed the number of job losses spiked amid the collapse of major chains such as Homebase and Ted Baker.

Around a third of all retail job losses in 2024, 33% or 55,914 in total, resulted from the collapse of businesses, with 38 major retailers going into administration, including other household names such as Lloyds Pharmacy, The Body Shop, and Carpetright.

The rest were through “rationalisation”, as part of cost-cutting programmes by large retailers or small independents choosing to close their stores for good, according to the centre.

Professor Joshua Bamfield, director of the Centre for Retail Research, said: “The comparatively low figures for 2023 now look like an anomaly, a pause for breath by many retailers after lockdowns if you like.

“The problems of changed customer shopping habits, inflation, rising energy costs, rents and business rates have continued and forced many retailers to cut back even more strongly in 2024.”

Independent retailers, which are generally small businesses with between one and five stores, shed 58,616 jobs in total during the year.

Read more from Sky News:
‘Multi-hazard storm’ to hit on New Year’s Day
Last man on UK’s loneliest housing estate

Experts said 2025 is expected to be another challenging year for high street firms, with an increase in national insurance contributions as well as a reduction in discounts for business rates – the property tax affecting high street firms.

The current 75% discount to business rates – due to end on 31 March 2025 – will be replaced by a less generous discount of 40%, with the maximum discount remaining at £110,000.

Alex Probyn, president of property tax at real estate adviser Altus Group, said: “The cut in the business rates discount from 1 April will disproportionately affect independent retailers who will see their bills rise on average by 140% adding an extra £5,024 for the average shop.”

Altus forecasts have predicted the change will save the Treasury money but cost the retail sector an extra £688m.

The British Retail Consortium has also predicted that an increase in employer national insurance contributions and a reduction in the threshold at which firms start paying will create a £2.3bn bill for the sector.

Professor Bamfield has predicted as many as 202,000 jobs could be lost in the sector in 2025.

“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020,” he added.

Manchester United Football Club is to cut the funding it provides to its charitable arm as part of a purge of costs being overseen by Sir Jim Ratcliffe, its newest billionaire shareholder.

Sky News has learnt that the Premier League club plans to inform the Manchester United Foundation that it intends to curb the benefits it provides – which totalled close to £1m last year – from 2025 onwards.

Sources close to the situation said a substantial element of the support given to the Foundation by the club would be axed, although Old Trafford insiders insisted on Sunday that it would still provide “significant” support to the charitable wing.

A decision is said to have been made by the club’s leadership to proceed with the cuts, with the Foundation expected to be informed about the scale of the reductions in the coming weeks.

In 2023, the club paid the MU Foundation nearly £175,000 for charity services, which include managing the distribution of signed merchandise to individuals raising funds for charitable causes.

Manchester United also provided gifts in kind amounting to £665,000 last year, which were understood to include use of the Old Trafford pitch and other facilities, alongside free club merchandise and the use of back-office services such as the club’s IT capabilities.

The MU Foundation works in local communities around Manchester and Salford to engage with underprivileged and marginalised people.

Its projects include Street Reds, which is targeted at 8- to 18-year-olds, and Primary Reds, which works in school classrooms with 5- to 11-year-olds.

It also organises hospital visits to support children with life-threatening illnesses.

Read more from Money:
Starmer throws down gauntlet to watchdogs with growth edict
Shoppers complain about Easter eggs already on shelves
Searchlight shines on £140m funding package for insurer Wefox

The disclosure about the latest target of cost-cutting by Sir Jim’s Ineos Sports group, which now owns close to a 29% stake of Manchester United, comes just a day after The Sun revealed that an association set up to facilitate relations between former players, would see its club funding axed.

A similar move has been made in relation to funding for the club’s disabled fans’ group, while hundreds of full-time staff have been made redundant in recent months and costs have been slashed across most areas of its operations.

People close to the club anticipate further cost-cutting measures being introduced as soon as next month.

One club source said it remained “proud of the work carried out by the Manchester United Foundation to increase opportunities for vulnerable young people across Greater Manchester”.

“All areas of club expenditure are being reviewed due to ongoing losses.

“However, significant support for the Foundation will continue.”

Sir Jim has injected $300m of his multibillion pound fortune into Manchester United, although it will need to raise substantially more than that to fund redevelopments to Old Trafford or a new stadium.

Last year, the club, which is listed on the New York Stock Exchange, lost more than £110m, with sizeable interest payments totalling tens of millions of pounds annually required to service its debt burden.

The men’s first team has seen an alarming run of results under Ruben Amorim, who was appointed to succeed Erik Ten Hag in the autumn.

United have lost three of their last four matches – the exception being a derby win away at Manchester City – and lie 14th in the Premier League table.

Mr Amorim has acknowledged that he could face the same fate as Mr Ten Hag unless results improve.

Dan Ashworth, who was brought in from Newcastle United FC as sporting director in the summer, left after just five months.

Responding to news of the plans, a spokesman for the Manchester United Supporters Trust (MUST) said: “The prospect of cuts to the charitable Foundation are another depressing example of the wrong priorities at United, cutting back on support to the community it purports to serve.

“Financial sustainability is important but instead of further investment to show ambition and go for growth, the Club is counter-productively trying to cut its way out of its problems.

“It’s hard not to conclude that the negative atmosphere they’re breeding is feeding its way through to the equally depressing performances on the field.”

Manchester United declined to comment formally on the proposed cuts to the funding of its charitable arm.