Bloomberg reported earlier this month that Logan’s Roadhouse, the Nashville based steakhouse, was preparing to file for Chapter 11 bankruptcy protection. According to reports, Logan’s, which has two-hundred and fifty restaurants in twenty-six states nationwide, would have to file bankruptcy as early as this month.
Soon after the rumors about bankruptcy began to surface sources close to the situation reported that Logan’s Roadhouse had not only missed debt payments which they were scheduled to pay to creditors in April of this year but also had made plans to delay filing annual and quarterly earnings reports. Additionally, reports indicated that the company would continue to “forge a forbearance agreement with lenders that expires on Aug. 15.”
Brad Jacobus, a representative for the steakhouse chain, issued a statement noting that the company did not have a comment but wanted to dispel what he termed “market rumors” but he did note at that time that, “The company’s leadership continued to be committed to Logan’s future success.”
Bankruptcy filed today for Logan’s Roadhouse
Today, however, Bloomberg reports that Logan’s Steakhouse did in fact file for bankruptcy protection in the U.S. bankruptcy court in Wilmington, Delaware.
According to company, the bankruptcy filing was not only needed to increase the ability of the company to get the necessary capital to “turnaround operations,” but it would also allow the company to balance its spreadsheet.
Under the current bankruptcy plan, Logan’s plans to shut 18 restaurants, although there is no information on which of the 250 stores might be shuttered. The CEO, Sam Borgese, is also leaving as part of the restructuring plan.
Logan’s Roadhouse has suffered from the general declining sales of upscale restaurants. Industry experts report that casual dining restaurants have increased in popularity as the dining public searches for lower cost dining options.
Golfsmith contemplating bankruptcy
In other bankruptcy news, Bloomberg also reports that Golfsmith International, the leading retailing of golf equipment and clothing, is also considering filing for bankruptcy protection.
Golfsmith has hired an investment bank to court potential buyers as well as Alvarez & Marsal to help potentially restructure the company as part of a potential sale and Chapter 11 bankruptcy filing.
A company spokesman provided a statement earlier this week stating that the company’s management team, “is focused on strengthening the company and its business operations to maintain and expand its position as a leading golf retailer.” And the company “has engaged financial advisers to explore potential strategic initiatives.”
What went wrong at Golfsmith?
According to industry insiders and those familiar with golfing, the Golfsmith’s issues are less about Golfsmith and their products but more about the declining interest in golf over the last ten years. In fact, experts put the blame squarely on the shoulders of the millennials who don’t have the patience or time to commit to what they perceive to be a slow-paced game.
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