Another Popular Restaurant Now Declares An Unexpected Bankruptcy

February 17, 2024

Another popular restaurant now declares an unexpected bankruptcy after closing several chains in Chicago, Arizona, and California.

Etta Collective, a small chain that operates multiple concepts in Chicago, Arizona and Los Angeles has closed several restaurants and has filed for Chapter 11 bankruptcy, reports TheStreet.

The chain closed its namesake restaurant in Los Angeles last year and abruptly shut down a Chicago-area restaurant, Sophie’s, earlier this year.

Now, after defaulting on a $2.5 million loan, the company’s owner, restaurateur David Pisor, has officially made the bankruptcy filing.

Pisor’s Etta collective runs a number of different concepts including its namesake restaurants, a bakery cafe, Alston House, a high-end steakhouse, and Kari, an upscale sushi concept.

The chain also has Marilyn’s, a planned concept that has not opened.

Pisor has said that the bankruptcy filing was made in order to help the company continue to operate.

“We have made a proactive decision to commence this strategic reorganization process with the cooperation of our lender, who has agreed to work with us so that we can come out of this process even stronger than before,” Restaurant Business reported.

The bankruptcy process could include a sale of the brand as the investor John Leahy has emerged as a bidder for the company’s assets.

“Our aim is to best position the Etta brand for future success,” Pisor said in a statement.

“By filing for protection under Chapter 11, we will be able to restructure our financial position while continuing our daily operations and keeping our locations open.

As has already happened in our Scottsdale location, we predict that we will emerge stronger both operationally and financially.”

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Also Read: Grocery Store With 217 Locations Now Closes For Good

Other Economy News Today

Another mall clothing retailer is now at high risk of bankruptcy as it prepares for debt restructuring, The Wall Street Journal reports.

Apparel retailer Express Inc. is preparing for a possible debt restructuring that could include a bankruptcy filing “within weeks,” The Wall Street Journal reported Monday, citing sources familiar with the matter.

According to the report, Express has hired M3 Partners and law firm Kirkland & Ellis.

Both entities specialize in debt restructuring, reports Retail Dive.

The retailer is looking to avoid a Chapter 11 filing by restructuring its debt outside the bankruptcy process, the report said.

Express reported total debt of about $275 million at the end of the third quarter, an increase from $235.4 million a year before.

During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand.

Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.

“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive.

“With high-interest rates, the retail company must decide between the ‘lesser of two evils.’

Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”

And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million.

That stock split enabled Express to regain listing compliance with the New York Stock Exchange.

Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.

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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy

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