The Covid-19 pandemic has once again swallowed another restaurant. Famous steakhouse hotshot Sizzler has filed for Chapter 11 bankruptcy protection. It joins JC Penney, Brooks Brothers, and Neiman Marcus that have all filed for protection due to the shocks triggered by the pandemic.
Sizzler Chapter 11
Sizzler finds itself in the current mess on the pandemic taking a toll on its business environment. Indoor dining closures compounded by people staying indoors have all made it impossible for the steakhouse to continue operating and meet its financial obligations. The issue has been complicated further by the landlord’s refusal to provide much needed rental abatements to cushion against the pandemic’s effects.
Likewise, the steakhouse giant has embarked on a restructuring drive on filling Chapter 11 protection as it seeks to reduce its debt and renegotiate leases with landlords. The restructuring drive will affect the chain’s restaurants across ten states.
In addition, Sizzler has filed customary motions as it seeks to be allowed to meet its contractual obligations while also fulfilling financial commitments to employees. The chain hopes to complete the Chapter 11 process within 120 days. It is still unclear the number of locations that will come back online after the restructuring process as Sizzler owns 14 restaurant locations, with 93 franchised.
Sizzler joins a number of chains that have found the going tough in the aftermath of the COVID-19 pandemic. The closure of malls and other gathering areas in the aftermath of the havoc causing virus have all but made business untenable as customers retreated to food delivery apps and cooking at home. The fact Sizzler sales were already declining prior to the pandemic all but made matters worse as financial obligations skyrocketed while returns shrunk.
Founded more than 60 years ago, Sizzler made a name for itself in Southern California before expanding to other states. It is best known for selling inexpensive steaks and offering buffet-like services that appeal to casual dinners and families.
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