A popular bakery chain now files an unexpected bankruptcy after facing lingering industry problems since the pandemic.
Patis Bakery has filed for Chapter 11 bankruptcy and plans to continue operating at least some of its locations.
“I’m here to share some significant updates about Patis Bakery, the first kosher café chain of its size in the U.S.,” Elon Kornblum reported in a message on the Great Kosher Restaurants Foodies Facebook page.
“Patis took a bold step to bring high-quality kosher cafés to areas that traditionally lack kosher options, including the heart of Times Square.”
The bakery chain, he said, has closed three locations.
“Recently, Patis Bakery filed for Chapter 11 bankruptcy as part of a strategic restructuring plan.
This move is designed to help them continue to serve our community,” he wrote.
“Despite the challenges, 11 of their locations remain open, ready to serve you artisan quality sandwiches and pastries you’ve grown to love.”
Patis has not filed a turnaround or funding plan with the bankruptcy court.
It continues to honor gift cards at its existing locations, reports TheStreet.
Kornblum, the publisher of Great Kosher Restaurants magazine, urged people to continue to support Patis.
“Without our support, there is a possibility that they could close their doors and I for one do not want that!
Let’s rally together and support Patis, ensuring they can keep bringing kosher excellence to our communities,” he added.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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Also Read: This Massive Mall Retailer Is Now Closing In California
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