Every kid’s favorite pizza-loving mouse has become a coronavirus casualty.
Chuck E. Cheese’s parent company, CEC Entertainment, filed for bankruptcy late Wednesday after the pandemic shuttered most of its family-friendly eateries.
The restaurant-and-arcade chain said it will use the Chapter 11 process to restructure its debt-heavy balance sheet through talks with financial stakeholders and landlords as plots a recovery from the COVID-19 crisis.
The bankruptcy “will allow us to strengthen our financial structure as we recover from what has undoubtedly been the most challenging event in our company’s history and get back to the business of delivering memories, entertainment, and pizzas for another 40 years and beyond,” CEC CEO David McKillips said in a Thursday statement.
CEC closed the dining rooms and arcades at its roughly 550 company-run Chuck E. Cheese and Peter Piper Pizza venues in March as the coronavirus spread around the world. The Texas-based company said it had reopened 266 of those locations as of Wednesday, which it expects to continue operating during the bankruptcy proceedings.
Comparable sales plunged about 22 percent in the first quarter even though most of its restaurants remained open for takeout and delivery. The company tried to boost its to-go business during the pandemic by quietly rebranding as “Pasqually’s Pizza & Wings” on delivery apps, but the move perplexed some customers.
CEC’s financial struggles predated the pandemic — it reported net losses of nearly $29 million last year and about $20.4 million in 2018. The company’s bankruptcy filings reveal estimated liabilities of $1 billion to $10 billion and roughly 1,500 potential creditors.
Atari co-founder Nolan Bushnell started the company as Chuck E. Cheese’s Pizza Time Theatre in 1977. CEC now has more than 600 Chuck E. Cheese locations and more than 120 Peter Piper Pizza restaurants, including franchises, across 47 states and 16 foreign countries and territories.
Private equity giant Apollo Global Management bought CEC in 2014. The company had plans to go public last year through a merger with a blank-check company, but the deal was nixed in July.