By Daniella Genovese | FOXBusiness
Dining chain Ruby Tuesday filed for Chapter 11 bankruptcy protection Wednesday, marking the latest eatery to fall victim to the “unprecedented impact of COVID-19.”
In doing so, the company hopes to reduce its liabilities and position itself for long-term sustainability.
Prior to seeking relief in bankruptcy court, the company disclosed it had secured lenders to support the restructuring process. As it reorganizes, the chain plans to continue to keep its restaurants open and operate “business as usual” while working to “preserve thousands of team member jobs.”
“This announcement does not mean ‘Goodbye, Ruby Tuesday’,” Ruby Tuesday CEO Shawn Lederman said in a statement.
Rather, the actions will “allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19,” Lederman said.
Even before the onset of COVID-19, however, the chain had been struggling for years due to lackluster sales, poor stock performance and rocky leadership, according to multiple reports.
Since the start of 2020, the eatery had already begun quietly shuttering restaurants.
On top of that, even after the global health crisis subsides, Aziz Hashim, founder and managing partner of Ruby Tuesday owner NRD Capital, told Restaurant Business Online in May that many of those locations will remain permanently closed.
“The final tally as to the permanent number of closures is to be determined for us,” he told the outlet. “Some of it depends on how quickly sales come back.”
Although the pandemic has “accelerated” restaurant closures, Hashim noted the closures were expected due to lackluster sales.
NRD Capital, an Atlanta-based private equity firm, purchased the struggling restaurant chain in 2017.