Sbarro Pizza chain has filed for bankruptcy protection for the second time within three years. Sbarro Pizza is struggling with too much debt due to a very low customer count, according to a Reuters report on Monday.
Sbarro – a Melville, New York firm – is being taken control of via its lenders under a Chapter 11 reorganization which is termed a ‘quick exit’ from bankruptcy before May 7, 2014, according to the report.
The pizza chain should cut its debt in excess of 80 percent. The company claims that nearly 100 percent of its lenders are in agreement to the new restructuring. The restructuring, however, needs to be approved by the court.
Sbarro was begun in 1956 and made an attempt to draw diners that enjoy their type of dining experience – reportedly similar to Panera Bread and Chipotle. However, their mall locations seem to have done them in due to a great decline in mall traffic in recent times.
Currently, Sbarro has 799 restaurants in more than 40 countries and employs in excess of 2,700 persons. The bankruptcy does not affect the restaurants owned by franchisees which number just under 600 restaurants.
This announcement follows February’s announcement from Sbarro that 155 of its 400 North American company-owned restaurants would close.