by Christopher Freeburn | February 20, 2014 11:47 am
On Wednesday, pizza chain Sbarro said it would shutter 155 shops as the company struggles to compete in a changing economy.
Sbarro locations are a popular staple of U.S. shopping mall food courts. However, Sbarro’s fortunes have fallen as mall foot traffic has fallen in recent years. The privately-held Sbarro emerged from bankruptcy protection in 2011 after transferring ownership to its senior creditors, Bloomberg notes.
So far, the new management has not managed to reverse the chain’s fortunes. In January, Standard & Poor’s Rating Service downgraded Sbarro’s credit rating from CCC+ to CCC-, calling its current finances “unsustainable” and suggesting that Sbarro would “likely seek to restructure its balance sheet.”
While Sbarro is reducing its presence in U.S. shopping malls, the chain is launching new locations in South America. In fact, Sbarro opened 81 new locations last year.
A family owned business originally started in 1956, Sbarro was purchased by an investment firm for $417 million in 2007. However, the business was hurt by declining consumer spending during and after the recent recession.
Sbarro currently operates more than 800 locations around the world.
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