Chain That Pioneered 'Breastaurant' Reportedly Nears Bankruptcy

It's hardly a secret that many casual dining chains are currently struggling amid rising costs. And the latest casualty is apparently Hooters, the chain restaurant known for its beer, wings, and attractive women in tightly-fitting, cleavage-baring tops.

Citing sources with knowledge of the financial arrangements, Bloomberg reports that the Atlanta-based Hooters of America is planning to file for bankruptcy in the coming months. The company is currently said to be working with creditors to come up with a plan to restructure the business, and has the law firm Ropes & Gray preparing a filing. Though, nothing has been finalized yet.

The news comes amid Hooters quietly closing dozens of "underperforming" locations last year. It's unclear how many Hooters restaurants are operating today, but as of June 2024 it was estimated to be around 250. That's down from 293 locations the company's portfolio claimed at the end of 2023, compared to 333 locations at the end of 2018. The trend is indeed sloping downward.

The latest bankruptcy talks are allegedly a result of liquidity issues and declining foot traffic. In 2021, the chain sold approximately $300 million in asset-backed bonds, which allows a company to leverage franchise fees and other assets as collateral.

"Ensuring the well-being of our staff is our priority in these rare instances," the company previously said in a statement. "This brand of 41 years remains highly resilient and relevant. We look forward to continuing to serve our guests at home, on the go and at our restaurants here in the U.S. and around the globe."

Restaurant chains have been increasingly competing for customers with meal deals and other incentives, as well as catering to Gen Z, as consumers have become more discerning with their spending. As Bloomberg notes, restaurant prices increased about 44 percent from 2015 to March 2024. That's compared to a 26 percent increase at grocery stores over the same period.

But the filing may not spell doom for Hooters. Red Lobster, which also filed for bankruptcy in 2024 after abruptly shuttering dozens of locations, is working hard to turn things around with new ownership.

source https://www.mensjournal.com/news/hooters-chain-nears-bankruptcy