Cici’s, a pizza buffet chain, recently filed for Chapter 11 bankruptcy and revealed its sale to its primary lender, D&G Investors. Amid the ongoing coronavirus pandemic and dine-In restrictions, the company has faced a rapid decline in funds.
D&G Investors acquired the chain for USD82 Million worth of debt in December. There are currently 318 locations within 26 states, less than half the amount it had over a decade ago.
Despite pizza chains such as Papa John’s, Domino’s Pizza and Yum Brands’ Pizza Hut, experiencing an increase in sales throughout the pandemic, buffet-style restaurants didn’t have the same results. Buffets were facing hardships long before the health crisis, however emerging dining restrictions and customers’ concern for hygiene advanced its demise.
Within the court filing, Cici’s indicated that its decline was mostly brought on by the growing competition as well as increase in food delivery. “This trend poses significant challenges to Cici’s all-you-can-eat buffet model, which depends on in-store dining for approximately 99% of its revenue,” Chief Financial Officer Richard Peabody said in a court filing.
Furthermore, in the filing the company noted that it had around USD10 Million to USD50Million in assets and USD50 Million to USD100 Million in liabilities. Cici’s had two main creditors, Weingarten Realty Investors and Saputo Cheese. However, In December D&G proceeded to acquire a substantial part of its debt, according to the trade publication Restaurant Business.
Peabody revealed that the company was set to see through a new strategy which would increase restaurant efficiency. Nevertheless, coronavirus, “significantly disrupted Cici’s restaurant operations and severely limited customer demand.”