A fast food chain now files an unexpected bankruptcy to reorganize its business after suffering financial distress from reduced traffic.
Sticky’s Holdings, the parent company of New York-based chicken fingers fast-food chain Sticky’s, filed for Chapter 11 bankruptcy on April 25 to reorganize its business after suffering financial distress from reduced traffic following the Covid pandemic, rising commodity prices, and lawsuits.
The debtor listed $5.75 million in assets and $4.67 million in liabilities in its petition. It’s largest unsecured creditor is US Foods, owed over $449,000.
Sticky’s, which opened in 2012, grew in sales from about $500,000 in 2013 to $22 million in 2023, but the Covid pandemic that significantly affected the restaurant industry starting in 2020 depressed store traffic.
Revenue suffered and foot traffic has not returned to pre-pandemic levels, according to a declaration filed by Sticky’s CEO Jamie Greer.
Rising inflation caused commodity prices to increase, forcing Sticky’s to raise its menu prices, which further stifled traffic to the restaurant chain.
As part of its efforts to reduce costs, the company in early 2021 exited its corporate offices on East 33rd Street in New York before its lease expired, according to the declaration.
The debtor’s landlord filed a summary judgment on June 22, 2021, to recover the remaining rent and legal fees, which a court granted with a $600,000 award.
The debtor has appealed the judgment costing the company more in legal fees.
Sticky’s is a chain of chicken fingers and sandwich restaurants that serves fresh, never frozen and antibiotic-free chicken.
It offers 18 in-house sauces for its chicken products.
Sticky’s currently operates 12 locations, with nine in New York and three in New Jersey.
It has closed two locations in New York and one each in New Jersey and Pennsylvania.
The company had established a franchise entity to operate potential franchise operations, but none opened.
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Also Read: A Massive Grocery Chain With 400 Stores Is Now Closing
Other Economy News Today
A massive shoe retailer now announces a new wave of layoffs to hit headquarters this summer, affecting over 700 employees.
Nike has announced its ‘second phase’ of mass layoffs, effective June 28, according to a Worker Adjustment and Retraining Notification (WARN) filing.
A total of 740 employees will be impacted in the retailer’s home state.
The layoffs are part of the 2% workforce reduction Nike announced in February, which is taking place across two phases, the company confirmed via email.
Nike said job titles and the number of employees in each category would be provided at a later date, once the company has determined them.
Bumping rights are not available for the impacted employees, reports Retail Dive.
“Nike’s always at our best when we’re on the offense. The actions that we’re taking put us in the position to right-size our organization to get after our biggest growth opportunities as interest in sport, health and wellness have never been stronger,” Nike said in a statement.
“While these changes will impact approximately 2% of our total workforce, we are grateful for the contributions made by all Nike teammates.”
The layoffs are tied to a cost-savings plan Nike unveiled in December, which is aimed at generating up to $2 billion in cumulative savings over three years.
Based on the company’s last annual report, the layoffs to 2% of its total workforce will impact more than 1,600 people.
Savings from the plan are set to be reinvested in driving growth, innovation and profitability.
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Also Read: A Massive Grocery Brand Now Files For Chapter 11 Bankruptcy
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