UNITED STATES— The popular pizza chain, California Pizza Kitchen, filed for Chapter 11 bankruptcy as of Thursday, July 30.
After 35 years of being in business, the pizza chain filed for bankruptcy as a means to help their long-term debt. California Pizza Kitchen is the latest to file for bankruptcy as the pandemic and its debt burden hampers its operations.
Along with filing for bankruptcy, the chain will close certain locations deemed not profitable out of the 200 worldwide restaurants it operates. In a press release by the company, CEO Jim Hyatt states,
“The unprecedented impact of Covid-19 on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK’s viability as an ongoing business.”
CPK has not paid their rent on many locations for the last few months and has had to acquire new financing in the amount of $47 million to be able to continue operations as normal as possible, along with $13 million in cash they currently hold. Revenues are currently down 40% compared to the same time a year ago due to current laws preventing indoor dining, which is how the chain operates its majority of sales.
Many restaurants and other companies are struggling since COVID-19 hit the entire world, causing many halts in business.