Another one bites the dust — or, in this case, the flour, as it’s Italian eatery chain Bertucci’s that has most recently filed for bankruptcy protection. The Northborough, Massachusetts-based restaurant plans to close around half of its locations and auction off the rest, according to news from Bloomberg.
Bidding starts at $19.7 million. If no higher offers come in, a Right Lane Capital affiliate has agreed to buy the chain for that price. The “stalking horse bidder” is including $1.7 million in cash, up to $4 million in cancellations of bankruptcy costs and $14 million in new notes.
Bertucci’s began to experience sales and revenue declines in 2011 and has been unable to turn the tables of its fate in the face of pressures from cheaper, faster alternatives competing for diners’ limited time and dollars.
Seven years later, the chain now owes $110 million to lenders in addition to $9 million in debt to suppliers, landlords and other unsecured creditors.
Bertucci’s roots appeared to be a good fit for the current dining climate. The chain built its brand on making food from scratch in brick ovens in an open kitchen where diners could watch the process.
However, more modern competitors serve food faster and don’t require customers to leave tips. Bertucci’s responded to these trends by pushing an Express Lunch offering that promises food on the table within 15 minutes, but in the end, it fell victim to the same rising tide that has been drowning mid-priced sit-down restaurant chains over the last decade.
When companies file for Chapter 11 bankruptcy protection, they generally stay in business while developing a turnaround plan, and it seems that Bertucci’s will do the same, albeit on a smaller scale. The chain is asking to cancel the leases at 29 of its 59 locations.
CEO Brian Wright, who took the wheel in 2016, will continue as CEO, and the company’s 4,200 employees will be taken on by the new owner.