Ne­wark Cosi closes as chain files bank­ruptcy

Cecil Whig - - REGIONAL - By JOSH SHAN­NON

Spe­cial from the Ne­wark Post

— The Cosi sand­wich shop on Main Street closed last week as the com­pany files for bank­ruptcy.

“We truly ap­pre­ci­ate your pa­tron­age and we apol­o­gize for any in­con­ve­nience,” a sign posted on the door read Tues­day. Chairs were stacked atop tables in­side the eatery, and the fur­ni­ture was gone from the out­door pa­tio.

The Bos­ton-based chain, which spe­cial­izes in sand­wiches and piz­zas on freshly-

NE­WARK, DEL

baked flat­bread, opened the lo­ca­tion at 111 E Main St. in 2008. It was one of two res­tau­rants lo­cated on the ground floor of the Wash­ing­ton House con­do­minium build­ing.

Last Wed­nes­day, the com­pany filed a Chap­ter 11 pe­ti­tion in United States Bank­ruptcy Court for the District of Mas­sachusetts, at­tempt­ing to re­or­ga­nize and sell the busi­ness.

In a press re­lease, com­pany of­fi­cials stated that 29 of its 74 com­pany-owned res­tau­rants were closed, but the 31 fran­chised lo­ca­tions are un­af­fected.

“This was a dif­fi­cult step, but it was nec­es­sary to ad­dress our liq­uid­ity is­sues,” Pa­trick Ben­nett, Sr., in­terim CEO, said in a state­ment. “Cosi’s core busi­ness and fran­chise base re­main in­tact, and we filed with the liq­uid­ity re­sources nec­es­sary to carry out the re­struc­tur­ing plan. We be­lieve this process will al­low the com­pany to right-size its bal­ance sheet, re­duce its debt, and fo­cus on im­prov­ing the busi­ness and sta­bi­liz­ing the brand.”

The bank­ruptcy comes as the chain copes with sag­ging sales num­bers. Last month, it fired its CEO and hired a con­sult­ing firm that spe­cial­izes in turn­ing around strug­gling busi­nesses.

Even be­fore the bank­ruptcy, the Ne­wark lo­ca­tion grad­u­ally had been scal­ing back its hours of op­er­a­tions, es­pe­cially dur­ing breaks in the Uni­ver­sity of Delaware sched­ule.

For more than a year, the Wash­ing­ton House build­ing was sur­rounded by scaf­fold­ing that was part of a project to fix struc­tural is­sues and re­pair the crum­bling façade. Cosi em­ploy­ees said at the time that the scaf­fold­ing was af­fect­ing busi­ness be­cause cus­tomers weren’t sure if the eatery re­mained open dur­ing con­struc­tion. The scaf­fold­ing was re­moved this sum­mer.

Each com­mer­cial ten­ant had to con­trib­ute ap­prox­i­mately $300,000 to­ward the cost of the ren­o­va­tion project. Condo own­ers are each on the hook for $100,000, though the condo as­so­ci­a­tion is en­gaged in a law­suit against the builder in at­tempt to re­coup the costs.

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