CEC Entertainment looks for lifeline as family entertainment restaurants have been hit hard by coronavirus pandemic
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Stock piling cash to survive the economic fallout from the coronavirus pandemic has been crucial for restaurant companies losing money from lost dine-in revenue. Cash-strapped brands have filed for bankruptcy, or permanently closed restaurants.
Trying to avoid a similiar fate is Irving, Texas-based CEC Entertainment, according to a Wall Street Journal report.
The publication, citing anonymous sources, said the parent company of Chuck E. Cheese is seeking a lifeline from lenders. It has asked for “a $200 million loan to finance a stay in bankruptcy,” according to the article. The company also faces a $1.9 million quarterly payment on loans due at the end of June, the Journal reported, citing unnamed sources.
Representatives for CEC, which has operates about 600 Chuck E. Cheese restaurants, did not return a request for comment.
On April 7, the company formed a restructuring committee to look at a range of strategic alternatives for the company amid the pandemic. In May, CEC filed a lawsuit to prevent a Dallas landlord from evicting the brand after it sought rent forgiveness in the COVID-19 downturn.
Family entertainment venues, whose business models are based on indoor game playing and social interaction among large groups, have been hit hard by the pandemic.
On Tuesday, Punch Bowl Social said it was forced to permanently close locations in Stapleton, Co. and Schaumburg, Ill. because the Denver-based company was unable to come to an agreement on new lease terms with landlords at both properties.
The first Punch Bowl Social opened in Denver in 2012. Named an NRN Hot Concept in 2018, the high-energy restaurant-arcade concept was looking to grow in new markets. Last year, Cracker Barrel bought a stake in the company, but announced plans to stop investing in the concept during the pandemic.
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Contact Nancy Luna at [email protected]
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