All sizzle no steak?
That seems to be the case for Sizzler USA, which filed for chapter Monday in California, becoming a member of the growing list of companies which have succumbed to monetary struggles brought on by the pandemic. Eating places particularly have been underneath extreme strain given various state mandates limiting or limiting indoor eating, and the latest discovering that restaurant eating sharply will increase COVID spread. California Pizza Kitchen additionally not too long ago filed for chapter.
In a press release, Sizzler mentioned that “The submitting is a direct results of the monetary affect the COVID-19 pandemic has had on the informal eating sector, significantly long-term indoor eating closures and landlords’ refusal to offer obligatory lease abatement.”
Certainly, many retail establishments from the Gap to other restaurant chains have been negotiating with landlords to try to renegotiate or delay lease funds because the pandemic lingers on.
Sizzler was initially based in 1958 by Del and Helen Johnson because the “Sizzler Household Steakhouse” in Culver Metropolis, CA. The thought was to deliver a elaborate steak dinner to the plenty at an inexpensive value (which was, again then, $0.99).
However according to Restaurant Business, the chain had been in decline lately: “Its unit depend declined 6.9% final yr, in response to knowledge from Restaurant Enterprise sister firm Technomic, and the variety of areas it operates now could be 15 fewer than it operated on the finish of 2019″ the publication reported.
Nonetheless the Chapter 11 submitting will solely have an effect on the corporate’s 14 company-owned areas, not its franchises or worldwide areas which make up nearly all of its areas.
This isn’t the corporate’s first journey by way of Chapter 11. The Wall Avenue Journal reported that in 1996 the chain previously filed for bankruptcy, closing 136 eating places because it exited markets within the East akin to Baltimore, Philadelphia and Florida.
On the time the Journal wrote that “Most of the shops have slipped because the steak-and-salad buffets launched about 5 years in the past have fallen out of favor. The chain will recast its remaining eating places in a brand new ‘American Grill’ format that may supply extra of a sit-down eating expertise.”
Extra must-read finance coverage from Fortune:
- Meet Snowflake, one of the buzziest tech IPOs ever
- Book recommendations from Fortune’s 40 underneath 40 in finance
- Commentary: Why the Democratic Get together should make a clean break with Wall Street
- ADP, the largest U.S. payroll service, won’t implement Trump’s “tax holiday” for some shoppers
- Fortune’s 2020 40 Under 40