TGI Fridays abruptly closes dozens more locations as a reported bankruptcy nears
New York
CNN
—
Nearly 50 locations of TGI Fridays abruptly closed within the past week, an ominous sign for the chain as a reported bankruptcy looms.
According to TGI Fridays' store locator, the chain has 164 restaurants remaining as of Monday, a sharp decline from the 213 that were open last week. It's the largest number of closures since January, when 36 "underperforming" locations were closed.
TGI Fridays didn't immediately respond to a request for comment about the closures, and a list of the affected locations was not released.
However, reports from local media reveals that restaurants across several US states were affected, including California, Ohio, New York, New Jersey, Florida and Missouri. Some closures even marked a complete exit from a city, notably in Columbus, Ohio; and Buffalo, New York.
At the beginning of the year, TGI Fridays had 270 US locations.
The closures come amid reports that TGI Fridays is about to file for bankruptcy. A few weeks ago, Bloomberg reported that the chain is "huddling with lenders" for a cash infusion to keep it operating while it navigates the Chapter 11 process.
TGI Fridays "will likely use Chapter 11 to seek a buyer for some portion of its business, to reject leases for unprofitable locations and to restructure its debt so it can emerge from bankruptcy with a smaller but still viable footprint," according to John Evans, co-founder and CEO of Hawthorn Advisors.
Evans told CNN that the chain's dwindling location count, changing consumer preferences and lower-cost competition from fast food has left the company "unable to service its debt" and that a filing could come in November before the next round of lease payments for its remaining restaurants.
A number of chains have filed for bankruptcy this year, including Red Lobster and Buca di Beppo, amid shifting consumer habits as inflation caused diners to reevaluate their spending.
