Sbarro, the Italian restaurant chain that’s a fixture in mall food courts, is preparing a bankruptcy filing following a nine-month review of its operations, according to people familiar with the situation.
/ Source: Bloomberg
The move, which could happen in the coming weeks, would let the pizza chain restructure as it struggles with sluggish demand and debt costs, said the people, who asked not to be identified because the matter isn’t public.
The filing would represent the company’s second trip to bankruptcy court in the past three years. Sbarro first sought protection from creditors in April 2011, citing slower sales and higher costs for ingredients such as cheese. As part of its latest efforts to streamline the company, Sbarro announced plans last month to close 155 locations in North America.
Jonathan Dedmon, a spokesman for the Melville, New York-based company at the Dilenschneider Group, declined to discuss a possible bankruptcy.
“During the past nine months, our new management team and its advisers have been thoroughly evaluating our business,” he said yesterday. “We are making significant progress. Sbarro continues to be a strong brand with a bright future.”
Sbarro’s comeback has been led by David Karam, who took over as chief executive officer last year. He previously worked as an executive at fast-food chain Wendy’s Co.
The pizza company’s restaurants are concentrated in malls, where slowing traffic and muted consumer spending have taken a toll on food courts. To offset sluggish growth at home, Sbarro has continued to expand overseas. It has more than 800 stores worldwide, including 81 that opened in 2013.