BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Mrs. Fields joins Bennigan's, Steak & Ale in bankruptcy]]>http://www.bloggingstocks.com/2008/08/15/mrs-fields-joins-bennigans-steak-and-ale-in-bankruptcy/http://www.bloggingstocks.com/2008/08/15/mrs-fields-joins-bennigans-steak-and-ale-in-bankruptcy/http://www.bloggingstocks.com/2008/08/15/mrs-fields-joins-bennigans-steak-and-ale-in-bankruptcy/#commentsFiled under: , , ,

The recession diet claimed another victim today. That's when the Wall Street Journal reports Mrs. Fields Famous Brands LLC -- which sells those formerly wonderful chocolate chip cookies and TCBY yogurt from 1,200 U.S. franchises -- bit the dust.

Mrs. Fields is cooking up a messy financial stew. Its pre-packaged bankruptcy will give bondholders the majority of its new common stock. In particular, the Journal reports that deal lets "note holders exchange their $195.7 million in notes for $90 million in cash, $50 million in new senior secured notes and 87.5% of the company's new common stock. The note holders are expected to recover 86.5% on their claims."

Mrs. Fields has been losing money and it posted a $10.7 million loss in the quarter ending June 2008-- almost eight times more than the $1.4 million it lost in the same quarter of 2007. When you're trying to pay for gasoline and keep your family fed, chocolate chip cookies and frozen yogurt are luxuries that many people can do without. The recent credit problems of Pizzeria Uno and the bankruptcy of Bennigan's and Steak & Ale suggest that many more retailers will bite the dust before this economic crunch is out.

That's the way the cookie crumbles.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Mrs. Fields joins Bennigan's, Steak & Ale in bankruptcy originally appeared on BloggingStocks on Fri, 15 Aug 2008 18:54:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bennigansbennigansclosinginthenewsmrs. fieldsMrs.Fieldssteak aleSteakAletcbyFri, 15 Aug 2008 18:54:00 EST<![CDATA[Benningan's, Steak and Ale go bankrupt as casual dining chains suffer]]>http://www.bloggingstocks.com/2008/07/29/benningans-steak-and-ale-go-bankrupt-as-casual-dining-chains-s/http://www.bloggingstocks.com/2008/07/29/benningans-steak-and-ale-go-bankrupt-as-casual-dining-chains-s/http://www.bloggingstocks.com/2008/07/29/benningans-steak-and-ale-go-bankrupt-as-casual-dining-chains-s/#commentsFiled under: , , ,

Benningan's, the casual dining chain where I had many bad dates, and Steak and Ale, a chain I never visited, have filed for Chapter 7 bankruptcy protection, underscoring how cash-strapped diners are not finding deals like unlimited breadsticks all that tempting.

The two chains, which are owned by billionaire John Kluge, have been in financial hot water for months, according to The Wall Street Journal. The paper reports that the chains were so broke that they did not have enough money to pay their employees for the rest of the week.

"Metromedia Restaurant Group (Kluge's company) earlier this year violated several terms of a lending agreement with GE Capital Solutions," the Journal reports. "It had been in negotiations with lenders for months to stave off the filing, while closing some stores and looking for a buyer, said two people involved in the matter."

Rising labor costs and soaring prices for food are killing casual dining chains. Cheesecake Factory Inc. (NASDAQ: CAKE) recently reported disappointing second quarter results, which featured the biggest drop in same store sales in the dining chain's history. Last year, activist investor Nelson Peltz acquired a 14% interest in the company. Brinker International Inc. (NYSE: EAT), owner of Chilli's Bar and Grill, and IHOP parent DineEquity Inc. (NYSE: DIN) are both down by double digits this year.

There is no hope for a turnaround in these companies anytime soon. Much like diners in these establishments, investors in these stocks are in for a world of indigestion.

Benningan's, Steak and Ale go bankrupt as casual dining chains suffer originally appeared on BloggingStocks on Tue, 29 Jul 2008 15:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bennigans closingBennigansClosingBrinker internationalBrinkerInternationalcakecommodity pricesCommodityPricesdinDineEquityEatfood inflationFoodInflationinthenewsJohn KlugeJohnKlugesteak and aleSteakAndAleTue, 29 Jul 2008 15:30:00 EST