Dave & Buster’s (NASDAQ:PLAY) may be facing bankruptcy and the news has PLAY stock falling hard on Thursday.
Recent reports claim that Dave & Buster’s has warned that a bankruptcy could be on the way due to the novel coronavirus. The pandemic has been battering retailers for months now and that includes the entertainment company.
According to the reports, Dave & Buster’s has reached a short-term debt relief agreement with lenders. However, that agreement only lasts until Nov. 1. If it can’t get its problems sorted out by then, bankruptcy might be its only option.
To go along with that negative news, the company has also announced it’s laying off more than 1,300 employees. These are furloughed workers spanning seven states that were unable to work due to the coronavirus, reports Fox Business.
Kathryn Rainey, senior director of Human Resources at Dave & Buster’s, said the following about the layoffs.
“We are taking this action because of the COVI-19-related business circumstances that were not reasonably foreseeable. We did not foresee how significantly and for how long a time the pandemic and related government lockdown orders would impact our business. We also did not foresee that lockdown orders, initially issued for short durations in only a few cities, would spread throughout the country and be repeatedly extended.”
All of this comes a week after the company reported absolutely abysmal results in its earnings report for the second quarter of 2020.
PLAY stock was down 26.2% as of Thursday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.