Source: Fortune
Summary
Yum Brands has sold Pizza Hut to private equity firm LongRange Capital for $1.5 billion. Yum China Holdings Inc. will acquire the chain’s mainland China locations in a separate deal worth $1.2 billion. Pizza Hut has struggled to keep up with other casual pizza chains, particularly Domino’s, which dethroned it as the world’s largest pizza chain in 2017. The chain has closed hundreds of locations in recent years, and its new ownership will have to address its persistent problems and find a path to future success.
Our Reading
The numbers tell one story. Pizza Hut’s sale to private equity firm LongRange Capital marks a new chapter for the struggling chain. With 19,974 restaurants worldwide, Pizza Hut has a long way to go to regain its former glory. Private equity’s involvement can be a double-edged sword – it can bring much-needed cash and guidance, but also strip the business of assets with little concern for its future success. Pizza Hut’s new ownership will have to address its menu, locations, and investment in technology to revive the company. The chain’s nostalgia factor, with its retro reputation and revived “Pizza Hut Classics” locations, may not be enough to override its inherent problems.
Author: Evan Null
