Pizza Rossa to cease trading and close Leadenhall restaurant after sales plummet

 
Alys Key
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The branch near Leadenhall Market will close this month and the company will cease trading (Source: Pizza Rossa)

Crowdcube-funded Pizza Rossa will close its Leadenhall site at the end of the month as the company ceases trading.

Writing to investors on Monday, founder Corrado Accardi said that the board decided last week to close down the company after 30 March.

The company revealed that street works near the store in Whittington Avenue, behind Leadenhall Market, resulted in a 40 per cent drop in sales last summer, and the effects were felt until November.

It also blamed the opening of new food operators in the Leadenhall area, as well as the proliferation of food markets in the City.

The company had raised £600,000 across two equity crowd raises on Crowdcube.

Rob Murray Brown of equity crowdfunding advisers ECF Solutions commented: "We told anyone willing to listen that Pizza Rossa was going bust as soon as they funded for the first time on Crowdcube. Their model was a classic example of a business plan designed by MBAs on a laptop with minimal experience in or reference to, the real world. As it turned out, we were right again. Even in collapse the CEO is still in denial about the real reasons – the concept was fatally flawed and the execution was very poor."

The company will now try to sell the brand to someone else, or to pay off all creditors and strike off the company, giving any left over money to shareholders.

If that fails it could go into liquidation.

The company said the final straw came when it was told to vacate its Leadenhall Court site by the end of March. The building is set to be knocked down to make way for the newest City skyscraper, with the beginning of the demolition process scheduled for early April.

However, Pizza Rossa said it had already been having trouble after 650 Amazon employees moved to the company's new London HQ.

"We decided that leaving the City would be essential for the survival of the company," Accardi wrote. But attempts to open another branch in Lower Marsh failed.

"Whilst we know that this news is frustrating, disappointing and unexpected, we gave Pizza Rossa our best," he said.

"I personally worked full time and was 100 per cent dedicated to Pizza Rossa since December 2013. I did not receive any salary or other compensation for the first approx 18 months, I was remunerated with less than £1,000/month for the following two years and I further supported the company’s cashflow by freezing payment of the last six months of my salary."

It follows the closure of nearby Bel Air, which folded after failing to secure funding and calling off a Seedrs round.

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