Bloomberg News reports that Uno Restaurant Holdings -- which operates Pizzeria Uno -- is the latest in a string of restaurants that can't stay afloat as consumers reverse splurge on their recession diets. It follows Bennigan's and Steak & Ale among those national restaurant chains that couldn't feed banks' hunger for loan repayment.
Bloomberg reports that Uno won't pay the interest due on its debt as scheduled, and S&P downgraded it as a result. It wrote that Uno "will delay paying interest, making use of a 30-day grace period allowed in the terms of its $142 million of notes due 2011, according to a statement from Standard & Poor's. S&P cut Uno by two levels to CC and said it would downgrade again to its lowest rating of D if the West Roxbury, Massachusetts-based company fails to pay on Aug. 15."
In addition to Bennigan's, Bloomberg reported that a big Pizza Hut chain filed for bankruptcy this month -- "Ohio-based Midland Food Services LLC, the operator of 92 Pizza Hut restaurants." I am a big fan of Uno's pizza and its nachos, but I guess that Uno has borrowed more money than its declining sales and rising food and labor costs permit it to repay. It remains to be seen whether it can renegotiate terms with its creditors.
If not, it will probably join its brethren in taking the hit for a lousy economy that's likely to get worse.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
Retailers, Restaurants Closing Doors
Store: Limited Too
Why? Citing weak sales, Tween Brands Inc. plans to close 26 of its Limited Too preteen stores and convert 560 to its lower-priced Justice brand.
Mark Lennihan, AP
Store: Steve & Barry's
It appears that Steve & Barry's will get a second shot, as Bay Harbour Management, which specializes in turning around distressed and bankrupt properties, offers to buy out some of the teen apparel retailer's assets. The Port Washington, N.Y., had filed for Chapter 11 bankruptcy protection last month and could have closed most if not all of its 276 stores.
Mark Lennihan / AP
Store: Boscov's
The Boscov's at the Monmouth Mall in Eatontown, N.J., is one of 10 locations the chain -- the nation's largest family-owned department store -- announced it will shut down.
Mike Derer, AP
Store: Bennigan's, Steak & Ale
Why? The Bennigan's and Steak & Ale restaurant chains, owned by the Metromedia Restaurant Group, filed Chapter 7 bankruptcy protection, in which a company seeks to shut down and liquidate its assets. Bennigan's indicated in the filing that it has 38 outstanding creditors and will have no funds remaining after they are repaid.
AP
Store: Linens 'n Things
Stores Closing: 177
Why? In a sign that its fortunes are beginning to turn, retailer Linens 'n Things, which filed for bankruptcy in May, announced that it would close fewer stores than it had anticipated. The chain will shut down 57 stores in its latest restructuring, 30 fewer than it had originally planned to close. Combined with its list of 120 closings announced along with its bankruptcy filing, the company will close a total of 177 stores.
Richard Lee, Detroit Free Press / MCT
Store: Mervyns
The future is in doubt for the low-end department store chain, which has been steadily closing stores since its purchase by several private equity houses in 2005. Mervyns' shelves are thinning as vendors and lenders have held up shipments and financing after the shop fell silent about its finances.
Douglas C. Pizac, AP
Store: Starbucks
Stores Closing: 600
Why? After years of ambitious expansion, the coffee retailer plans to close 500 more U.S. stores than it initially planned, most of which were opened only in the last two years. Starbucks says it will try to place affected employees in neighboring coffee shops.
Paul J. Richards, AFP / Getty Images
Store: Goody's Family Clothing
Stores Closing: 103
Why? Tennessee-based Goody's announced June 9 that it was filing a voluntary petition for Chapter 11 bankruptcy reorganization in Delaware, where the company is registered.
shopgoodys.com
Store: A.C. Moore Arts & Crafts
Stores Closing: 7-10 Stores
Why? Citing the current tough retail environment, the East Coast crafts retailer said it was closing 5 to 7 percent of its 139 stores and will rein in plans to expand.
A.C. Moore
Store: Home Depot
Stores Closing: 15
Why? In a first for Home Depot, at the start of May it announced plans to close 15 underperforming stores in the U.S., following 1,450 job cuts since December.
Justin Sullivan, Getty Images











Reader Comments (Page 1 of 5)
8-13-2008 @ 11:27AM
Iridium said...
Not surprised that Midland LLC would go under. Midland restaurants are run like garbage.
When your #1 concern is food and labor costs, trying to get them just above 3rd world poverty levels. You are going out of business. Good service is the #1 rule of customer retention.
Hiring terrible workers, making half cooked pizzas that take an hour to get to your table is the #1 way to never have a person walk through your door again.
I won't ever go into a place with a lowest combined food and labor plaque on the wall. All that tells me is that they push a few workers as hard as they can. Come on one extra worker for a shift is about $60.
8-13-2008 @ 11:30AM
william lindblad said...
Looking at today's oil market data and comparing this against the main stream of economists I am beginning to think that there is a radical train of thought afoot. Bad looks good. Really bad is not too bad. Fuel prices retreating and an expectation that the consumer will stay in conservation mode all add up to the economy being evaluated by a new version of Marx and Engels.
I might point out that these two spent a lot of time trying to figure out humans. Many communist regimes tried to make these ideas work. This type of thinking has never worked - you always get the wrong answer because of the human element.
8-13-2008 @ 7:33PM
Neil m said...
I dispise the Limited Too. They are way over priced, and their promotions are dishonest. The employees are all young girls, and they would love the customer to go away and not bother them. The management got what they deserve.
8-13-2008 @ 8:36PM
dan said...
That Jennifer Anniston is either one pain in the rear or terrible in bed because she can't keep a man to save her life. Iwould take anyone over her.
8-13-2008 @ 9:02PM
ED said...
I am not surprised at Home Depot closing store.
Unless some changes are made in their employees
behavior all of the Home Depot stores will be closing. I have never seen a store like Home Depot in my life. From my experience the employees come to work, put on their little orange aprons and stand at the end of the aisles carring on a conversation with each other completey oblivious to customers. I just give up and leave. I wonder why Home Depot tolerates this behavior from its employees. The employees seem to be unaware that sometimes customers need assistance. All they employees are interested in is their conversation with each other---all day long.
8-13-2008 @ 9:11PM
Chris Leete said...
No one will lament the passing of overpriced greasy pizza and lame, rude service. One visit to the local Uno made a believer out of me, Never Again!! Unless restaurant franchises dramatically change the way they do business, they will always be a risky investment for the ong term
8-13-2008 @ 9:26PM
chewyisdabomb said...
Never heard of the Pizza Chain! I'm in TX. can't recall any here!
8-13-2008 @ 9:28PM
Alan said...
I am very disgusted with AOL. I pay for a service to read, and view subject matter. but when I am blocked for lack of a download. I feel I am not getting my moneys worth, I speak of this silly "Adoby Flash Player",,, To Aol , : I don't want it. I do not like the set up and requrements. I will not put up with this. I will go to another IPS.
8-13-2008 @ 9:31PM
Seymour said...
Some lame comments, as usual. Some of you are happy that yet another American business is going under. I don't care if you think their pizza is greasy. That's not the point. The point is, ever since Bush got elected, American businesses are going down like flies. Only his rich CEO buddies are flourishing. And some of you geniuses voted for him...TWICE!
8-13-2008 @ 9:42PM
Joe Turner said...
PIZZERIA UNO HAS "CHICAGO STYLE" PIZZA, WHICH IS TO SAY "CRAPPY".
ONLY ST LOUIS STYLE PIZZA HAS "STYLE". THIN, USES PROVELONE INSTEAD OF MOZZARELLA AND LOTS OF MEAT.
WON'T MISS PIZZARIA UNO AT ALL.
8-13-2008 @ 11:41PM
bluesdog said...
this isn't about a pizzeria- it's about a miserably failed presidency. wake up sheeple, you are being led to the slaughter again. you elected bush twice, and he lied just like his dad. before that you elected reagan twice- you all need your heads examined.
8-14-2008 @ 12:12AM
Rudy said...
Darksun010
Many Small Businesses are hurting because of the fail policies of the Bush Administration. McCain will continue those policies and you can see it in his voting record.
McCain is also in the Drug companies back pocket. He didn’t like the bill that would allow Drug Reimportation. McCain along with the RNC also oppose the purchasing cheaper prescription Drugs from Canada for senior’s .McCain and the RNC want Free Trade but when it comes to prescription drugs no way. Bush/McCain will do everything possible to protect the profit margins of Big Drug Companies. McCain and the RNC are in favor of raising the Social Security retirement age to 68 or even to 70 years old. The RNC like McCain, they advocated abolishing minimum wages, unions, and long-term contracts, and advocate increasing labor-market flexibility. McCain backed business groups by voting last year against the Employee Free Choice Act (EFCA).
Voted NO on repealing tax subsidy for companies which move US jobs offshore. The more good paying jobs you move overseas the lower the wages go in this country.
Voted YES on defunding renewable and solar energy. (Jun 1999)
Supports opening border to Mexican trucks. (May 2002) This is another issue where McCain wants to put the screws to American Workers.
Voted YES on visas for skilled workers. This will kill off many of our skilled and higher paid construction jobs. If you can’t move the job to another country import the workers from another country to do the work here. Putting screws to American Workers the McCain Way.
8-14-2008 @ 1:24AM
bartgelino2004 said...
The article states that Uno will not be paying the interest on its debt as scheduled and has opted to delay paying the interest, taking advantage of a 30 day grace period. Have you ever taken advantage of a 25-30 day grace period on your credit card? If you think that this is the President of the United States fault, you need to have your head examined! The restaurant can do many things to increase sales and customer satisfaction. Each restaurant is responsible for their own success or failure and it is NOT the responsibility of any president, republican, democrat or independent.
Bluesdog and Seymour, I don't recall seeing your names on any presidential ballot, I guess you just don't have what it takes to be President of the United States Of America! Vote for the winning party, Vote REPUBLICAN...
8-14-2008 @ 2:18AM
JETCHARTER1 said...
There's a good reason to say goodbye to Midland (UNO) and the Pizza Huts that are going out of business. Their products just aren't what they used to be! At the beginning of their reigns, they both had decent (thought not the best) pizza. Then the big business side of the house got involved. PROFIT, PROFIT, PROFIT... Every business should have a nice profit! But in the case of Midland, their greed meant "Let's cut back on the quality a bit", "Just a little less of everything" , "Maybe a little artificial flavoring and coloring", "They'll never notice the artificial cheese"...they LOVE our name!...they LOVE our name! Wonder why sales is down? PAPA JOHNS just BLINDSIDED YOU!
8-14-2008 @ 3:00AM
mikeloc said...
lousy economy or a bunch of over educated, under learned children in charge taking it down the garden path, then saying "what happened?" we did what our teacher told us would work. idiots that never paid attention in a history class. or don't they teach it anymore, just diversity crap.
8-14-2008 @ 6:08PM
teltech54 said...
No surprises here. There are going to be MANY more restaurants that are going to fold in the coming months. This is in line with my prediction that 35 percent of ALL businesses will fold before the end of SPRING.
8-16-2008 @ 7:53AM
Patricia said...
All these store closings are just putting more people in the unemployment lines and leaving more Americans without health insurance. But the economy is up... line of crap. Prices on everything continue to climb, people losing their homes left and right, the cost to heat a home is going up. This country is heading for a long cold winter. But the CEO's are still getting giant bonuses as companies close down or make cutbacks, something is wrong with this picture.
8-16-2008 @ 8:54AM
Catman said...
I don't mind the Uno pizza. It has a unique crust and it's pretty tasty to me. However I still think the neighborhood Italian pizza joints are better.
8-16-2008 @ 8:57AM
vespa2000 said...
government bail out on the way?
8-16-2008 @ 9:06AM
Mike said...
Pizza Hut is just terrible. Dirty, the worst employees, and their pizza gets worse by the month. If it was not for this $5 deal they have going, both pizza hut and dominos would close in a week. Keep in mind, that $5 pizza is worth about $1 and made with garbage. And, in most cases I am not surprised at these places closing. I mean, what idiot pays $10 for a dozen of Mrs. Fields cookies. Actually, it's unreal to me how half of them stay open in the first place. Now, go give krispy kreme $8 for a dozen donuts,,,,,unreal.