Bar Louie, the Texas-based gastropub chain founded in Chicago 30 years ago, has filed for Chapter 11 bankruptcy protection and closed more than a third of its corporate-owned locations.
Thirty-eight corporate-owned locations that were closed over the weekend due to "accelerating" sales declines. The chain, which had grown to 134 locations in 26 states, cites recent expansion, an "inconsistent brand experience" and decreased traffic to shopping malls as leading to the declines, according to the filing Monday in a Delaware bankruptcy court.
Founded in downtown Chicago in 1990, Bar Louie offers a range of beer, liquor and pub food such as burgers and sandwiches. Many of the restaurants are located near shopping malls and business districts. The company, which saw revenue fall 3.7% to $252 million last year, hired an investment banker in September to sell the chain, generating three letters of intent, but no deal.
Bar Louie lists more than $100 million in outstanding debts, according to the filing. As part of the bankruptcy process, secured lenders have agreed to bid on the assets in order to guarantee a sale, if no other buyer steps up with a higher offer. The minimum bid will be $82.5 million plus assumed liabilities, according to the filing.
"The sale through Chapter 11 will help us to focus on our profitable core locations and expand in areas that have a proven track record of success," Tom Fricke, CEO of Bar Louie, said in a news release.
The company, which received a $22 million line of credit from its lenders, expects to emerge from Chapter 11 within 90 days under a new owner.
