Ber­tucci’s pizza says it could go out of busi­ness

USA TODAY International Edition - - MONEY - Nathan Bomey

Brick oven pizza chain Ber­tucci’s filed for Chap­ter 11 bankruptcy pro­tec­tion late Sun­day and may close restau­rants.

North­bor­ough, Mass.-based Ber­tucci’s said in a court fil­ing it ex­pects to im­me­di­ately re­ject 29 leases. It was not im­me­di­ately clear whether those lo­ca­tions were still open or had al­ready closed.

For now, the com­pany said it has 59 re­main­ing op­er­at­ing lo­ca­tions, and they are still open. But the com­pany warned that it faces a se­ri­ous risk of go­ing out of busi­ness with­out a speedy bankruptcy sale.

The chain has al­ready slashed more than $5 mil­lion in costs through job cuts, lease con­ces­sions and other mea­sures since the start of 2017.

But the ca­sual din­ing sec­tor’s ail­ments were too much to over­come. Sales are be­low 2011 lev­els, ac­cord­ing to a court fil­ing.

“With the rise in pop­u­lar­ity of quick-ca­sual restau­rants and over­sat­u­ra­tion of the restau­rant in­dus­try as a whole, Ber­tucci’s — and the ca­sual fam­ily din­ing sec­tor in gen­eral — has been af­fected by a pro­longed neg­a­tive op­er­at­ing trend in an ever in­creas­ing com­pet­i­tive price en­vi­ron­ment,” the com­pany said in a fil­ing. “Con­sumers have more op­tions than ever for spend­ing dis­cre­tionary in­come, and their pref­er­ences con­tinue to shift to­wards cheaper, faster al­ter­na­tives.”

Ber­tucci’s said it had reached a ten­ta­tive deal to sell its as­sets to Right Lane Dough Ac­qui­si­tions LLC, which ex­pects to con­tinue the busi­ness.

The chain, which is owned by in­vest­ment firm Levine Le­icht­man Cap­i­tal Part­ners, warned that with­out the deal it faces a se­ri­ous risk of liq­ui­da­tion.

The com­pany cur­rently em­ploys more than 4,200 work­ers. It has about $119 mil­lion in debt.

To try to re­ha­bil­i­tate the com­pany, Ber­tucci’s in 2016 re­vived its clas­sic recipes with a con­tem­po­rary flair. And in Septem­ber 2017, the com­pany launched a mo­bile app to de­liver dig­i­tal sales.

But the com­pany said it was un­able to pay its debts on time.

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