Cosi enters bankruptcy for second time
NEW YORK: Cosi Inc, a fast casual restaurant chain, filed for its second bankruptcy on Monday with plans to cut costs and shift its focus to catering under recent pressure from changing consumer dining habits.
The Boston-based restaurant chain filed for Chapter 11 bankruptcy in Wilmington, Delaware, with assets and liabilities between $10 and $50 million, according to court documents.
The filing comes after Cosi commenced a restructuring of its operations by closing 30 of its stores in December and increased its emphasis on catering, according to a company statement.
It previously sought creditor protection in 2016.
Cosi offers soup, sandwich and salad combinations for consumers who are on the go or looking for fast options to dine.
The filing comes as the restaurant industry faces a reckoning of high debt levels and over-saturation in the market.
NPC International Inc, the world’s biggest operator of Pizza Hut restaurants, was said to be considering filing for Chapter 11, Bloomberg News previously reported.
Restaurants have also been pressured by new accounting rules that require more leases to be recorded on a company’s balance sheet, rising labour costs, and greater competition from other chains as consumers move from dine-in to pickup and delivery options.
Cosi retained Jason Fensterstock as chief restructuring officer. In this role, he will assist with the development and implementation of its business plan and the associated initiatives, which will take into effect under the bankruptcy restructuring, according to a company statement.
This plan includes cost-cutting measures and the opening of new locations in the first half of 2020, the company said.
Founded in 1998, the company known for its oven-baked flatbread, offers breakfast, lunch and dinner, as well as desserts and catering services.
It operates in locations across the United States and Costa Rica, with plans to expand in Central America in the future, according to its website.