Las Vegas Sun

November 17, 2018

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Sizzler declares bankruptcy

LOS ANGELES -- Sizzler International, the nationwide steakhouse chain that has struggled to keep pace with consumer tastes, has filed for bankruptcy protection and plans to close 130 of its U.S. restaurants today.

The move puts 4,600 employees, most of them part-timers, out of work and leaves the Los Angeles-based company with 85 company-owned restaurants, 235 franchised restaurants in the United States and a profitable international operation.

"We're trying to get back to the essence of Sizzler, to what made it work," said Kevin Perkins, Sizzler's chief executive.

The Sizzler chain has three restaurants in the Las Vegas Valley. A spokesman in the company's corporate office said two local restaurants already have been closed, at 2390 Bonanza Road and at 110 N. Boulder Highway in Henderson.

A local Sizzler manager said it's business as usual at the three existing restaurants with no changes planned for the labor force.

For years, Sizzler has attempted to appeal to health-conscious diners of the 1990s by investing heavily in elaborate salad bars featuring vegetables, prepared salads, pastas and soup. But competitors soon offered bigger and better salad bars. At the same time, Sizzler's rising prices prompted cost-conscious restaurant-goers to head for cheaper, fast-food outlets.

A special arrangement allowed Sizzler to file its Chapter 11 petition in U.S. Bankruptcy Court in Los Angeles on Sunday night.

Perkins described the bank ruptcy filing as a strategic move, one that would allow Sizzler to escape costly leases on unprofitable restaurants while also enabling the company to forge ahead with a new format focusing on made-to-order grill items and other steakhouse fare.

The filing will hit employees in Northern and Central California the hardest. Sizzler is closing 32 restaurants in those regions and laying off 1,161 employees.

The second most affected area is Baltimore/Washington, D.C., where 25 Sizzler restaurants will close and 906 workers will lose their jobs.

The company is also closing six restaurants that operate under the name Buffalo Ranch Steakhouse.

Forty-four Sizzler restaurants in Australia and Asia will not be affected by the bankruptcy filing.

The Sizzler filing is a bit unusual because the company, founded 39 years ago in a converted trailer south of Los Angeles, is in fairly healthy financial shape.

It enters bankruptcy protection with about $272 million in assets and about $98 million in liabilities, said Christopher Thomas, the company's financial officer. The company expects to emerge from Chapter 11 in six to eight months.

In fiscal 1995, Sizzler earned $6.7 million on revenue of $462.2 million. Systemwide sales, which includes all sales of franchisees, totaled $937.7 million.