Sbarro Preparing For Bankruptcy Filing
The mall food court may be losing one of its mainstays in the form of pizza. Sbarro LLC will purportedly file for Chapter 11 bankruptcy as early as next week, as reported by the Wall Street Journal. The news comes just two years after the company managed to recover from another Chapter 11 restructuring.
The chain is in the process of soliciting votes for a prepackaged restructuring plan that could put them in better standing while in bankruptcy court. If it gets enough votes, due by the end of this week, Sbarro could file for Chapter 11 by Sunday.
Unfortunately for the pizza chain, a dose of struggle has been part of the company recipe for the past eight years. After taking on debt from a 2007 buyout by MidOcean Partners, Sbarro began closing the doors on more than 150 locations.
The global recession in 2008 did not help matters for the struggling restaurant, as foot traffic in mall food courts dropped off precipitously. Sbarro, now $140 million in debt, managed to retain some of its market share with revamped recipes and fresher recipes, in addition to focusing on its standalone locations.
Though a Sbarro spokesman claims, âWe are making significant progress,â the company plans to close 155 of its 400 locations in North America to help cut costs. Following the closures, Sbarro will still maintain over 800 company-held and franchise locations worldwide.