Sbarro expects to cut its debt load by more than 80 percent, including by eliminating $140 million of secured debt, and said lenders representing nearly all its debt backed the restructuring. The company will invite other buyers to submit better offers.
Founded in 1956, Sbarro had tried to boost sales by revamping its recipes to entice diners who increasingly favor “fast casual” chains such as Chipotle and Panera Bread.
The closely-held company has also been closing poorly performing restaurants, and, according to Moody’s Investors Service, has been facing high food, labor and occupancy costs.
Last month, Sbarro said it would shut 155 of the roughly 400 restaurants it owns in North America. The company still has more than 800 restaurants in over 40 countries. Its bankruptcy does not affect 600 restaurants owned by franchisees.
“Sbarro has been stuck with an outdated business model,” said Michael Whiteman, a restaurant consultant and president of Baum & Whiteman LLC in Brooklyn, New York. “Its biggest shortcoming is that it sells food that has been sitting out for a while, and more people want food made to order.”
Whiteman couldn’t be more correct. The heatlamp petrified pics of pizza in the gallery will tell the tale in full.
