Update, June 25, 2020 10:37 a.m.: CEC Entertainment, the parent company of Chuck E. Cheese, has officially filed for Chapter 11 bankruptcy today, according to Reuters.
The Reuters report cited struggles amid the COVID-19 pandemic, which has put a huge strain on the food industry, on top of the company's pre-existing debt, as the impetus for the bankruptcy filing, which had been rumored for weeks. In a release, the company called this time the most challenging in its history.
"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 and get back to the business of delivering memories, entertainment, and pizzas for another 40 years and beyond," said David McKillips, CEC’s Chief Executive Officer.
The company has re-opened 266 Chuck E. Cheese and Peter Piper Pizza venues and intends to keep them open as it continues with bankruptcy proceedings.
Original, June 12, 2020 12:31 p.m.: As restaurants and businesses begin to reopen in states as restrictions from the coronavirus pandemic ease, it's possible that one of your kids' favorite spots may never reopen its doors. Owners of Chuck E. Cheese are currently working behind the scenes to avoid filing for bankruptcy, according to a new report.
Nearly $1 billion in debt, the Texas-based chain has approached lenders in recent weeks as it seeks $200 million in loans to help it remain afloat financially, the Wall Street Journal reports. At the end of the month, CEC Entertainment faces a $1.9 million quarterly loan payment.
While there are currently 610 Chuck E. Cheese sites in nearly all 50 U.S. states, 65 percent of support staff and a majority of non-exempt workers were laid off after the pandemic hit. Before the changes, the company posted a nearly three percent growth in 2019. One question remains key to the company's future, according to The Journal's Soma Biswas and Heather Haddon:
The question now for Chuck E. Cheese is whether the new world of social distancing poses an existential threat or if families will continue to seek places to gather to celebrate birthdays and other child-focused events.
Chuck E. Cheese recently courted some pretty wild controversy along with Applebee's when it was discovered that the brands were selling food prepared in their restaurant kitchens under different names on take-out apps.
"CEC Entertainment, Inc. recently launched Pasqually’s Pizza & Wings nationwide," a rep said at the time: "Pasqually’s Pizza & Wings, named after another favorite member of Munch's Make Believe Band, shares kitchen space with the Chuck E. Cheese restaurant, ensuring high-quality, fresh ingredients."
Follow House Beautiful on Instagram.
You Might Also Like