Sbarro, a Food-Court Staple, May File for Bankruptcy as Early as Next Week
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Thought we were kidding when we said 2014 could be the end of fast-food pizza? Sbarro, a staple in food courts across America, is reportedly preparing to file for bankruptcy protection as soon as next week.
Sbarro is soliciting votes due by the end of this week for a "prepackaged restructuring plan" that attempts to streamline its journey through bankruptcy court, according to reports in The Wall Street Journal. If it gathers enough votes, Sbarro could file for Chapter 11 protection as early as Sunday.
Sbarro has reportedly been reviewing its operations over the last nine months. In mid-February, the pizza chain announced it was closing 155 of its 400 restaurants in North America to cut costs. Following the closures, there will still be more than 800 Sbarro restaurants worldwide.
This will be the second time that Sbarro has filed for bankruptcy, the first being in April 2011. The company has been hampered by their primary location in mall food courts, as mall traffic has declined. Traffic at retail stores was down 14.6 percent this past November and December from the same period last year, and is expected to slide 9 percent in the first quarter of this year, according to retail analytics firm ShopperTrak.
Fast-food pizza chains are increasingly endangered as fast-casual rookies encroach on their territory. Domino's and Pizza Hut have both attempted to shift their image to a classier, fast-casual mold, with Domino's remodeling restaurants and Pizza Hut showcasing high-tech table prototypes and revamping recipes. Meanwhile, new comers such as Chipotle-financed Pizza Locale and Buffalo Wild Wings-backed PizzaRev are making waves as fast-casual pizza concepts.