On Monday Perkins & Marie Callender's Inc. filed for bankruptcy citing poor economic conditions in some of their larger markets - like Florida - as the reason for the decline in business. So far 31 of the restaurants have closed.
According to the Chapter 11 bankruptcy filing, economic conditions in Florida and California were the main reason for having to file. The claim is that with high unemployment rates, many long-time customers no longer had the extra spending cash to dine at the restaurants.
Aside from economic constraints, the bankruptcy filing also states that part of the problem is that the restaurants did not upgrade and keep with the times like competitors did, which led to many locations becoming "dated and stale." In addition to not upgrading locations, one restaurant analyst even pointed to the fact that the restaurants failed to keep up and offer some of the healthier alternatives that many diners now want to eat.
When looking at the history of the company, Marie Callender's has been around for a long time with the company being founded in 1948 as a wholesale pie catering business. In 1964 the first restaurant location opened.
Then, in 1999 a private equity firm bought the chain, and in 2006 merged it with Perkins Family Restaurants, a move that some say hurt the overall business as the merger meant taking on too much debt.
Now, under the Chapter 11 bankruptcy filing, the company will be restructuring and a private equity firm will take over the majority of the business from the current owner. The restructuring should be done by late October.
Source: Los Angeles Times, "Parent of Marie Callender's files for bankruptcy protection," Shan Li, 14 June 2011