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Not Sbarro! Ubiquitous Pizza Chain Prepares For Bankruptcy
By
Garth Johnston
Published Apr 1, 2011
Modified Apr 1, 2011
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By
Garth Johnston
Published Apr 1, 2011
Modified Apr 1, 2011
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Sbarro, arguably the king of mall food court pizza (and Michael Scott's favorite pizza), is getting ready to file for Chapter 11 bankruptcy protection as soon as Monday, the Journal reports. The chain, which originally started in Brooklyn (really!), has been struggling amidst the down economy with roughly $365 million in debt.
Sbarro started in 1956 as an Italian grocery store in Brooklyn selling cheese, salami and sausage. In 1967 it found its calling when it opened its first mall location at Brooklyn’s Kings Plaza Shopping center and promptly started expanding like gangbusters. In 1985 it went public and then in 1999 the Sbarro family bought the company back for around $400 million. That situation lasted until 2007, when private-equity firm MidOcean Partners bought the chain from the three sons of Gennaro and Carmela Sbarro, who founded the company.
But since the MidOcean buyout things have not been easy for the Melville, N.Y, based chain, which employees about 5,000 people. Over the last two years the company has closed a number of its restaurants and in the first nine months of 2010 it lost about $29.3 million off of sales of roughly $239 million. It began exploring bankruptcy options at the start of the year and hopes that it can secure $35 million in debtor-in-possession financing so it can remain in business while in bankruptcy.
Got all that? Good. You can now resume not caring one iota about Sbarro.
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brooklyn
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pizza chain
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Garth Johnston
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