The casual-dining chain has hired a law firm to prepare a filing, Bloomberg reported. The chain has been struggling for years.
Financial Struggles
Hooters has been experiencing significant financial difficulties, leading to plans for a bankruptcy filing. The chain hired Ropes & Gray, a law firm, to assist in preparing the documents needed for the filing. Recent credit evaluations indicated a decline in revenues, which has put the company under financial strain.
Operational Challenges
The company has had a history of failing to keep up with its operational expenses, lagging significantly in payments to vendors. It was reported that Hooters took four times longer to settle its debts compared to other chains in the restaurant industry, indicating a serious cash flow problem.
Sales Decline
From 2018 to 2023, Hooters saw a nearly 15% decline in sales nationwide. This downturn reflects broader challenges within the casual dining sector, where many establishments are grappling with changing consumer preferences and rising operational costs.
Closure of Locations
In an effort to cut losses, Hooters has had to close several underperforming locations. Additionally, the company has been actively seeking restructuring advisors to explore its options moving forward.
