The coronavirus pandemic has taken a toll on businesses all around the world, and that includes some stateside staples. Unfortunately, that list now includes the beloved children's destination Chuck E. Cheese. Chuck E. Cheese's parent company CEC Entertainment has filed for Chapter 11 bankruptcy protection after having to close so many locations due to the pandemic, though they are reopening locations that were shut down due to the pandemic throughout the bankruptcy process. That also includes Peter Piper Pizza locations, which along with Chuck E. Cheese and CEC Entertainment as a whole is owned by private equity firm Apollo Global Management (via CNBC).
In a regulatory filing from April, CEC Entertainment revealed it is not paying rent, and earnings in the quarter ending in March were between $39 and $43 million. Same-store sales during that period fell 21.9%, which is actually the company's busiest and often most profitable time.
CEC Entertainment says that they expect to use Chapter 11 to restructure their debt and set a long term strategy, and it will continue to reopen locations. Earlier this year there were potential buyers interested in purchasing the company, though it probably wouldn't be for near the $948 million Apollo purchased CEC Entertainment for back in 2014.
"The Chapter 11 process will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company's history," CEO David McKillips said in a statement.
CEC currently has 734 restaurants and stores in the U.S. and abroad, and they are looking to reopen many of those locations. That said, it's going to be a tall order to turn things around quickly, as the coronavirus pandemic has not dissipated as many hoped. Even if Chuck E. Cheese opens up all those locations to start bringing in revenue again, the turnout is not going to be nearly what they need to immediately get back in the black, as many are not going to risk the health issues for a pizza party.
We hope things can turn around though because after losing Toys R Us, we don't want Chuck E. Cheese to follow suit.0comments