Popular retailers and restaurants are filing bankruptcy due to the pandemic.
Data shows there were more than fifty restaurant and retail bankruptcies in 2020 due to the pandemic. Some of the chains that filed have been well-known for years to the communities in which they serve. One of the most recent eateries to file, Punch Bowl Social, declared Chapter 11 bankruptcy in late December.
Prior to the pandemic, the restaurant’s twenty locations served as a “eatertainment” hot spot, combining social venues with a much sought-after menu. Established in 2012, Punch Bowl Social had secured a $140 million investment from Cracker Barrel. But as the shutdowns began in the states where the chain was most popular, such as California, Texas, and areas of the Midwest, CEO Robert Thompson left, and signs of problems emerged.
“In a now too-familiar tale, the debtors’ businesses were immediately and significantly adversely affected by COVID-19,” Punch Bowl said in its bankruptcy court filing. “Unfortunately, because of restrictions limiting the number of patrons at each venue, as well as the public’s uneasiness of going out to eat or drink in public during a pandemic, each of those venues was losing money on a daily basis.”
Other significant shakeups to the restaurant world took place as the coronavirus spread. Parent company for Brio Italian Mediterranean and Bravo Fresh Italian, FoodFirst Global Restaurants, was forced to file for Chapter 11 mid-April 2020. Pre-pandemic, the company had already shuttered ten locations and that number skyrocketed to 71 of its 92 restaurants after the outbreak.
Logan’s Roadhouse is another chain impacted by COVID-19 closures. The restaurant, based in Nashville, Tennessee was operating 230 locations in 23 states. In 2018, Craftworks Holdings acquired the already struggling name. Then, in March 2020, it filed Chapter 11. The following month, Craftworks announced all Logan’s locations would remain closed for the foreseeable future.
NPC International Inc., the parent company of Pizza Hut and Wendy’s, also filed for Chapter 11 bankruptcy in July. It looks like both infamous chains are surviving, however, and will hopefully make a comeback. IHOP’s CFRA Holdings declared bankruptcy in mid-May, closing 49 restaurants in North Carolina, South Carolina, Tennessee, and Virginia.
Chuck E. Cheese’s parent company, CEC Entertainment Inc., filed for Chapter 11 in June. The company tried to stay afloat by operating under an alias Pasqually’s Pizza and Wings on delivery apps like GrubHub, DoorDash and UberEats. However, the revenue earned apparently was not enough to make ends meet. When the strategy didn’t work, CEC wasn’t sure what direction it could take the franchise. An ever-popular place for children’s parties, the Chuck E.’s announced it may close indefinitely.
Lim Hyatt, CEO of California Pizza Kitchen, announced at the end of July that the eatery would file in Texas with the future of other CPK locations nationwide still up in the air. Additional brands making Chapter 11 moves due to shutdowns include Men’s Wearhouse, which plans to close 500 stores “over time,” Ann Taylor, Lane Bryant, New York & Company, Brooks Brothers, Lucky Brand, Neiman Marcus, J. Crew, True Religion, Pier 1 Imports, J.C. Penney, and many others.
Sources:
11 Major Restaurant Chains That Have Filed for Bankruptcy
This Popular Chain Restaurant Just Filed for Bankruptcy
Every Household-Name Brand Filing for Bankruptcy or Closing Stores Amid the Coronavirus Pandemic
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