Newark Cosi closes as chain files bankruptcy
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-
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.