American restaurant chain operator Ruby Tuesday has become the latest victim of prolonged economic effects of the coronavirus pandemic. The Tennessee-based company, which is known for its garden bar, ribs, seafood and steak, officially filed for Chapter 11 Bankruptcy Protection early Wednesday.
According to its court filing, Ruby Tuesday plans to permanently close down 185 restaurants that were forced to shut their doors during the onset of the coronavirus pandemic. With the closures, the company will be left with 236 company-owned outlets and dozens more run by 10 franchisee groups.
Ruby Tuesday's chief executive officer, Shawn Lederman, mentioned in a statement that the filing will not mean the end of the brand. He clarified that the bankruptcy filing is meant to help it restructure its debt and improve its finances so that it can continue to stay in business. Lederman said that they have mostly now reached agreements with the company's lenders, who are supportive of its restructuring.
The company's chief marketing officer, Jenifer Boyd Harmon, said that existing outlets that have since reopened will continue to serve its customers as per usual. "We remain committed to providing our guests with safe, quality experiences at all our current locations," she added.
The decision to seek court protection comes as sit-down restaurants continue to struggle amid the prolonged pandemic. While other restaurant chains were able to somewhat offset their losses through online deliveries, Ruby Tuesday wasn't as lucky. The company heavily relied on sit-down dining, which accounts for about 90% of its total sales. When the pandemic hit, it was unfortunately unable to adapt quickly to the shift despite its efforts to move to deliveries and takeouts.
Even before the pandemic hit, Ruby Tuesday was already struggling to keep up with its debts. The company had been facing increasing competition from fast-food and fast-casual restaurants, which had been sprouting out across the nation. It also previously reported reduced traffic at its mall-based locations as people shifted to new food delivery options and online takeaway.
Before the health crisis, Ruby Tuesday had about 7,300 employees throughout its nationwide outlets. When it was forced to close down most of its restaurants, the company temporarily furloughed about 7,000 workers.
