Cosi Files for Second Bankruptcy Amid Changing Dining Habits
Cosi Files for Bankruptcy Amid Changing Consumer Dining Habits
(Bloomberg) -- Cosi Inc., a fast casual restaurant chain, filed for its second bankruptcy with plans to cut costs and shift its focus to catering under recent pressure from changing consumer dining habits.
The Boston-based restaurant chain filed for Chapter 11 bankruptcy in Wilmington, Delaware, with assets and liabilities between $10 and $50 million, according to court documents. The filing comes after Cosi commenced a restructuring of its operations by closing 30 of its stores in December and increased its emphasis on catering, according to a company statement. It previously sought creditor protection in 2016.
Cosi offers soup, sandwich and salad combinations for consumers who are on the go or looking for fast options to dine. The filing comes as the restaurant industry faces a reckoning of high debt levels and over-saturation in the market. NPC International Inc., the world’s biggest operator of Pizza Hut restaurants, is said to be considering filing for Chapter 11, Bloomberg News previously reported.
Restaurants have also been pressured by new accounting rules that require more leases to be recorded on a company’s balance sheet, rising labor costs, and greater competition from other chains as consumers move from dine-in to pickup and delivery options.
Cosi retained Jason Fensterstock as chief restructuring officer. In this role, Fensterstock will assist with the development and implementation of its business plan and the associated initiatives, which will take into effect under the bankruptcy restructuring, according to a company statement. This plan includes cost-cutting measures and the opening of new locations in the first half of 2020, the company said.
The case is Cosi Inc., 20-10417, U.S. Bankruptcy Court for the District of Delaware (Wilmington).
To contact the reporters on this story: Katherine Doherty in New York at kdoherty23@bloomberg.net;Allison McNeely in New York at amcneely@bloomberg.net
To contact the editors responsible for this story: Rick Green at rgreen18@bloomberg.net, Dawn McCarty, Nicole Bullock
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