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Casual dining has suffered as fast casual has grown. (Photo: Getty Images)
Brick oven pizza chain Bertucci's filed for Chapter 11 bankruptcy protection late Sunday and may close restaurants.
Northborough, Mass.-based Bertucci's said in a court filing it expects to immediately reject 29 leases. It was not immediately clear whether those locations were still open or had already closed.
For now, the company said it has 59 remaining operating location, and they are still open. But the company warned that it faces a serious risk of going out of business without a speedy bankruptcy sale.
More: Retailers filing for bankruptcy or going out of business in 2018
The chain has already slashed more than $5 million in costs through job cuts, lease concessions and other measures since the start of 2017.
But the casual dining sector's ailments were too much to overcome. Sales are below 2011 levels, according to a court filing.
"With the rise in popularity of quick-casual restaurants and oversaturation of the restaurant industry as a whole, Bertucci’s — and the casual family dining sector in general — has been affected by a prolonged negative operating trend in an ever increasing competitive price environment," the company said in a filing. "Consumers have more options than ever for spending discretionary income, and their preferences continue to shift towards cheaper, faster alternatives."
Bertucci's said it had reached a tentative deal to sell its assets to Right Lane Dough Acquisitions LLC, which expects to continue the business.
The chain, which is owned by investment firm Levine Leichtman Capital Partners, warned that without the deal it faces a serious risk of liquidation.
The company currently employs more than 4,200 workers. It has about $119 million in debt.
To try to rehabilitate the company, Bertucci's in 2016 revived its classic recipes with a contemporary flair. And in September 2017, the company launched a mobile app to deliver digital sales.
But the company said it was unable to pay its debts on time.
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey.
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CELEBRITY chef Jamie Oliver’s Australian eatery adventure looks to be all but over with the collapse of his restaurant chain.
The Australian arm of Jamie’s Italian has been placed in voluntary administration.
On Monday, the Canberra branch failed to open following the weekend’s trade. A sign on the door announcing the closure read, with characteristic chirpiness, “Big Love Mr O xxx”. Oliver is not in the country.
The chain’s five further branches have been sold by the Jamie Oliver Restaurant Group. The company said they will remain open under the new owners.
The Jamie’s Italian restaurants in Australia have rubbed some customers up the wrong way for refusing to take bookings, forcing some wannabe diners to queue for up to three hours for a table. Many chose not to.
The company’s Australian arm said bookings can now be made.
The chain’s collapse comes during a torrid time for the chef’s commercial interests with scores of his restaurants closing in his native Britain as purse strings tighten in the face of Brexit and increased staffing costs.
$130M IN DEBT
In January, Oliver’s company announced it would close almost half the UK branches of his Jamie’s Italian chain, with the loss of 450 jobs, after racking up debts of $130 million. Unpaid staff wages accounted for $4 million of that debt, reportedThe Sun .
His company also announced it would wind up his entire Barbecoa steakhouse chain, just a year after seven Jamie’s Italian branches were also shuttered along with a Jamie Oliver branded pizza business.
In addition, Recipease, his cooking school and high end grocery chain, closed its doors.
The 42-year-old has reportedly pumped millions of pounds of his own cash into his restaurants to keep them afloat.
Two years ago, Oliver bought his Australian restaurants outright and placed them into a new company after hospitality firm Keystone Group, which had operated the eateries, went under.
However, that company — which operates branches in Adelaide, Sydney, Brisbane, Perth and Parramatta — has now also collapsed into administration.
RESTAURANT SALE
Voluntary administrators are appointed when a business is close to insolvency and they are tasked to either save, sell-off or wind down the company.
In a statement, a spokesman for Jamie Oliver Group said after a period of “in-house management” the group would now partner with Brisbane-based Hallmark Group.
Hallmark is known for operating Irish theme pub Finn McCool’s, located on Brisbane’s party strip of Fortitude Valley.
“The team brings a huge amount of experience and passion for our brand, from collaborating with the key suppliers to our food philosophy, and we look forward to working with them as they develop the Jamie’s Italian restaurant offering across Australia,” the spokesman said.
Hallmark said far from closing the remaining restaurants, they would be looking for new sites.
A representative for the group said: “We’ll be working closely with Jamie and the UK team, staff and local suppliers to keep driving the business forward and delivering exceptional experiences across the country,” reported The Courier-Mail.
‘BIG LOVE, MR O XXX’
However, it all comes too late for the Canberra restaurant. A sign posted on the door of the branch on Monday, in the CBD’s Canberra Centre, read: “Dear Canberra, It is with great sadness that Jamie’s Italian Canberra has had to close its doors indefinitely.
“We thank you for all of your support over the last 4.5 years. From all the staff at Jamie’s Canberra we bid you a fond farewell,” reported Fairfax.
It was signed “Big Love Mr O xxx”.
By Tuesday, there was no longer any mention of the Canberra outlet on the Jamie’s Italian website.
In Australia, Oliver has a lucrative partnership with Woolworths supermarkets that uses the chef as a brand ambassador and stock a range of “Created with Jamie” fresh home brand meals.
He is also behind the Ministry of Food cooking schools in Geelong and Ipswich, although a school in western Sydney has closed.
DISAPPOINTMENT
Critics have said his restaurants, that are more casual dining then posh nosh, had disappointed customers, particularly in the UK which is overrun by chain restaurants.
“While I’m sure people don’t expect that Jamie will actually be cooking their food when they eat in a Jamie’s Italian, his association with the brand is very strong and this can lead to disappointment if they feel they haven’t had the best experience,” Stefan Chomka, editor of the UK’s Big Hospitality magazine, told The Sun last month.
“When Jamie’s Italian opened … it felt like it was offering something new.
“However, the company, by its own admission, did become a bit too complacent over the past few years and failed to keep up with fresh competition, with its rivals offering a similar experience but at lower prices.”
Eating out has suffered with Brits holding onto, rather than spending, their disposable income. A lift to minimum wages has also been blamed by some restaurant chains for a decline in revenue that has led them to close underperforming sites.
Oliver’s personal fortune has fallen as the golden days of his restaurant empire fades. But don’t be feel too sorry for the chef; his books and personal appearances are still in high demand and he has a nest egg of reportedly close to $300 million to fall back on should he decide to hang up the apron.
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