New York, October 6 (FinanceEnquiry.com) ? Friendly Ice Cream Corp. closed 63 stores overnight, laid off 1,200 workers and filed for bankruptcy protection yesterday. It had opened its first shop during the height of the Great Depression. Friendly?s said that high supply costs, the challenging economy and changing customer preferences had forced it to take this action.
Thirty of the stores that have been shut are located in Massachusetts, including shops in Brockton, Charlestown, Hanover, Leominster, Needham, Quincy, Stoughton, and Wareham. 424 stores in 16 states will remain open. Friendly?s chief executive Harsha V. Agadi remarked that ?It?s a tough day.?
Agadi said that $70 million in financing has already been procured after the company had filed a voluntary petition under Chapter 11 in the US Bankruptcy Court for the District of Delaware. He said that with this financing, the company hopes for a speedy restructuring but it will terminate leases for stores it closed to avoid paying rent. He remarked that ?Rents we have are rents from a few years back and now they look and feel and sound outrageous.?
Friendly?s is planning to sell itself at an auction with an affiliate of its current owner, private equity firm Sun Capital Partners Inc. Out of its outstanding debt of $297 million, $267.7 million is a secured promissory note owned by affiliates of Sun Capital, Agadi, and others.
Source: http://www.financeenquiry.com/friendly%E2%80%99s-closes-63-stores-files-for-bankruptcy-protection/
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