Business closures–specifically in the restaurant industry–continue to skyrocket as the coronavirus pandemic continues on throughout the United States.
According to reports from CNN Business, California Pizza Kitchen filed for Chapter 11 bankruptcy on Thursday. Unsurprisingly, the filing is due to the impact of COVID-19 closures on the pizza chain’s business, largely because the lingering ban on indoor dining across the country has prevented CPK from making money. On-premise service accounts for 80 percent of the restaurant’s sales.
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“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,” CEO Jim Hyatt said in a release.
California Pizza Kitchen says that by filing, they will “reduce its long-term debt load, and quickly emerge from bankruptcy as a much stronger company.” The pizza chain has around $13 million cash on hand with nearly $47 million secured in new financing, with their financial limitations preventing them from paying rent on a majority of their locations over the last few months.
The pizza chain has attempted to rebuild sales by increasing takeout and delivery. They also directed consumers online to their CPK Market to buy groceries too. Sales recovered a bit, but it still wasn’t enough to fill the gap. According to Business Insider, they were still “more than 40% lower in late June than they were in the same period the prior year.”
Sadly, this news really shouldn’t come as a surprise. NPC International–a franchisee for over 1,200 Pizza Hut locations in the United States–filed for bankruptcy earlier this month, explaining the move was necessitated by prolonged restaurant shutdowns due to COVID-19, just like California Pizza Kitchen.
This article was originally posted on Bossip.com.