This year, major and iconic retailers have started filing for Chapter 11 bankruptcy as a result of problems with supply chain interruptions, increased prices, and other financial concerns.
Large retailer Rite Aid filed for bankruptcy on October 15 after years of financial hardship due to competition from Walgreens Boots Alliance WBA drug shop Walgreens, Walmart WMT, Costco COST, CVS, and Sally. But it wasn’t fierce rivalry that drove Rite Aid to the brink; rather, it was the possibility of culpability from a civil complaint the Department of Justice brought against the business in March 2023. fast-food
The DOJ claimed in its lawsuit that Rite Aid’s pharmacists “repeatedly filled prescriptions for controlled substances with obvious red flags” and “intentionally deleted internal notes about suspicious prescribers,” which contributed to the opioid epidemic. The debtor wants to work out a good bankruptcy settlement without having to pay billions of dollars.
In an effort to save expenses, the firm has already designated 178 locations for closure.fast-food
The upscale furniture manufacturer Mitchell Gold + Bob Williams abruptly shuttered its 27 locations across 14 states and numerous Canadian provinces in late August after disclosing financial difficulties and preparing to file for Chapter 11. The retailer was eventually forced into Chapter 7 liquidation by U.S. Bankruptcy Court of Delaware Judge Laurie Selber Silverstein after the firm failed to get sufficient debtor-in-possession funding.
Restaurant operators file Chapter 11
Restaurants are also having a tough time this year. Several fast-food restaurant franchisees have faced economic distress from a number of issues such as labor needs, economic woes and changes in consumer behavior. Burger King operators Meridian Restaurants and Toms King filed Chapter 11 this year blaming high costs and slow sales, Restaurant Dive reported. Hardee’s restaurant operator Summit Restaurant Holdings with 106 units also filed bankruptcy in May and either closed or sold off its restaurants. fast-food
Some struggling restaurant chains are able to close underperforming locations without filing bankruptcy. In June, vegan/vegetarian fast-casual restaurant chain Veggie Grill closed six of its restaurant locations in California citing reduced demand for its fast-casual dining offering from a shift to hybrid work models, the company’s CEO T.K. Pillan said in an email to Patch. A review of the company’s website shows that it still operates 12 locations in California, two in Oregon, two in Washington and one in Massachusetts.fast-food
A fast-food vegetarian chain files for bankruptcy
According to its website, the Boston-based chain of vegetarian fast-food restaurants Clover Food Lab filed for Chapter 11 Subchapter 5 bankruptcy on November 3 in the U.S. Bankruptcy Court for the District of Delaware in an effort to restructure its operations because its sales haven’t fully recovered from the effects of the Covid pandemic.fast-food
“COVID altered every aspect of our business, as restaurants like us,” the firm said on its website. Although Clover has witnessed a gradual rebound in sales (and the establishment of a whole new portion of Clover with our meal box service), our sales are still below pre-pandemic levels due to the significant changes in how we eat, drink, work, and socialize. Consequently, we have chosen to restructure the business under Chapter 11 Subchapter 5 bankruptcy.” fast-food
Sourse : msn.com
A well-known fast-food chain has filed for Chapter 11 bankruptcy, claiming falling revenues and growing debt. The company’s bankruptcy filing is indicative of the difficulties the fast-food business is experiencing, since it has been suffering for a number of years.
The company’s declaration of bankruptcy comes at a difficult period for the fast-food sector. Fast-food restaurants are under pressure from a number of factors, including rising food prices, a labor shortage, and growing competition from other foodservice industries. fast-food
The company’s declaration of bankruptcy also represents a shift in the consumer environment. Food alternatives that are more sustainable and healthful are in high demand from consumers. Many fast-food establishments are losing business to more expensive and healthful eating choices as a result of their inability to meet these criteria. fast-food
For the company’s clients and staff, the bankruptcy filing is a sad day. It is, therefore, also a chance for the firm to reorganize its operations and come out of bankruptcy stronger. The business could have to renegotiate its contracts with suppliers, shut some of its restaurants, and fire staff. But if the business can implement these adjustments, it could be able to survive and prosper in the next years. fast-food
