Sizzler joins the list of chains declaring Chapter 11 due to COVID

All sizzle, no steak?

That appears to be the case for Sizzler USA, which filed for bankruptcy Monday in California, joining the growing list of companies that have succumbed to financial struggles caused by the pandemic. Restaurants in particular have been under severe pressure given varying state mandates restricting or limiting indoor dining, and the recent finding that restaurant dining sharply increases COVID spread. California Pizza Kitchen also recently filed for bankruptcy.

In a statement, Sizzler said that “the filing is a direct result of the financial impact the COVID-19 pandemic has had on the casual dining sector, particularly long-term indoor dining closures and landlords’ refusal to provide necessary rent abatement.”

Indeed, many retail establishments from Gap to other restaurant chains have been negotiating with landlords to try and renegotiate or delay rent payments as the pandemic lingers on.

Sizzler was originally founded in 1958 by Del and Helen Johnson as the Sizzler Family Steak House, in Culver City, Calif. The idea was to bring a fancy steak dinner to the masses at an affordable price (which was, back then, $0.99).

But according to Restaurant Business, the chain had been in decline in recent years: “Its unit count declined 6.9% last year, according to data from Restaurant Business sister company Technomic, and the number of locations it operates now is 15 fewer than it operated at the end of 2019,” the publication reported.

However the Chapter 11 filing will only affect the company’s 14 company-owned locations, not its franchises or international locations which make up the majority of its locations.

This is not the company’s first trip through Chapter 11. The Wall Street Journal reported that in 1996 the chain previously filed for bankruptcy, closing 136 restaurants as it exited markets in the East such as Baltimore, Philadelphia, and Florida.

At the time the Journal wrote that “many of the stores have slipped as the steak-and-salad buffets launched about five years ago have fallen out of favor. The chain will recast its remaining restaurants in a new ‘American Grill’ format that will offer more of a sit-down dining experience.”

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