The privately-held casual dining chain filed Chapter 11 bankruptcy documents In Delaware, following a tentative deal signed last month that handed the business to certain secured lenders, according to a court declaration.
“This announcement does not mean ‘Goodbye, Ruby Tuesday,'” Chief Executive Shawn Lederman said. “Today’s actions will allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19,” reports Market Watch.
The restaurant chain has already closed about 200 locations over the past several years, and according to the filing, will close an additional 185 restaurants. The company is now operating 236 dining rooms, and those locations will remain open as the company works on its “turn-around” plan.
Ruby Tuesday files for bankruptcy, after closing dozens of locations in 2020 October 7, 2020
In 2017, NRD Capital Management bought Ruby Tuesday for about $335 million. At that time, Ruby Tuesday operated over 500 restaurants, and even then was struggling as consumer tastes shifted and mall traffic was seeing a decline. Within a year of the loan, the company was in trouble again, just trying to make rent payments.
This latest victim of the coronavirus pandemic is a far cry from the first of the year when the restaurant industry was looking forward to a year of growth. One of the biggest concerns was a shortage of workers. The delivery sector of the industry was just beginning to have a growth spurt.
However, the coronavirus pandemic threw a huge wrench into the restaurant industry’s machinery – causing thousands of workers to lose their jobs and worse yet, forcing the closing of a substantial number of family owned restaurants that will never reopen.
Consumers, restricted to stay-at-home orders enacted by most states, had to change how and where they ate.Now, more than six months later, according to National Restaurant Association estimates – over 100,000 bars and restaurants – or 15 percent of all eating and drinking establishments – have permanently closed. This means that close to $240 billion in restaurant sales will be lost this year to the pandemic.
