Steakhouse owner Sizzler USA, which helped usher in the casual restaurant concept 62 years ago, announced it has filed for voluntary Chapter 11 bankruptcy.
“The filing is a direct result of the financial impact the Covid-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement,” the company said in a statement.
Bankruptcy “will allow us not only to do everything we can to support our employees and franchisees during this time, but also to be better-positioned for growth as we emerge to become a more vibrant company.”
Sizzler said the bankruptcy filing will permit it to reduce long-term debt and renegotiate leases with landlords to “effectively operate its 14 company-owned restaurants throughout the duration of the Chapter 11 process,” the company said.
“It is our ultimate goal to keep all Sizzler locations open for business throughout this process of renegotiating leases, which will be completed within about 120 days. Franchisees will not be impacted during the Chapter 11 process.”
Sizzler joins a list of storied retail companies that have been forced into bankruptcy by the pandemic - and factors that were in place before the pandemic. That includes J.C. Penney, Neiman Marcus and Brooks Brothers.
Not all casual restaurant chains have been suffering, however. Chipotle Mexican Grill (CMG) - Get Report shares have soared 48% year to date, and McDonald’s (MCD) - Get Report has climbed 9%. Pizza chain Domino’s (DPZ) - Get Report has jumped 37% year to date, and Papa John’s (PZZA) - Get Report has gained 31%.