Going shopping at the mall for some people is a trip that might involve a stop at the food court for lunch or a snack. For employees of stores in the mall, a stop at the food court might occur during a lunch break. For some people who enjoy eating Sbarro’s pizza, that pleasure might soon be a distant memory.
The pizza chain, which is based in New York, has recently announced that it will close 155 locations in North America. Now, it is preparing to file for bankruptcy protection, citing decreased mall traffic as one of the mitigating factors. This isn’t Sbarro’s first time seeking bankruptcy protection. In April 2011, the company cited slow sales and increasing ingredient costs as the reason it needed protection from creditors.
Standard & Poor’s has a negative outlook on the pizza chain. A report says that the capital structure of the company is unsustainable, which could lead to filing for Chapter 11bankruptcy protection or selective defaults.
While the company is faring poorly in the U.S., it seems to be doing well overseas. In 2013, it opened 81 new stores and currently has over 800 stores worldwide.
Finding out that your business isn’t faring well isn’t something that is easy for a business owner to discover. If you have made the discovery that your business can’t afford to pay its bills, you might find it necessary to seek protection under Chapter 11 bankruptcy. Understanding your options might help you to decide if this is the right option for your company. Seeking the advice of an experienced New York bankruptcy attorney can help you get answers to any questions you may have.
Source: Bloomberg Luxury, “Sbarro Said to Prepare Bankruptcy Filing as Mall Traffic Slows” Lauren Coleman-Lochner and Beth Jinks, Mar. 01, 2014by