Store Closing 'Tsunami' Continues with Quiznos, Sbarro Bankruptcies
Only days after national pizza chain Sbarro filed for bankruptcy, sub sandwich chain Quiznos followed suit, filing for Chapter 11 protection hoping to reduce its debt by over $400 million.
The sandwich chain, known for its toasted sub sandwiches, filed bankruptcy after a year of trying to stave off the decision.
Quiznos launched a major expansion plan several years ago but quickly retreated, closing many of its newly opened franchise locations.
In its announcement of the filing, Quiznos CEO Stuart Mathis said that the company was taking steps to help franchisees struggling to stay open in this floundering economy, including reducing the costs of food stuffs and giving low cost loans to hurting locations.
The Quiznos announcement comes less than a week after pizza chain Sbarro announced its own bankruptcy woes.
Sbarro filed for Chapter 11 protection for the second time in less than three years and said it would close 155 of its 400 locations.
For Sbarro, the big problem is the decline of America's shopping malls. Foot traffic has sharply declined in malls, and that is where most of Sbarro's stores are located.
Quiznos and Sbarro join what has been called a tsunami of store closings as the retail sector contracts in the face of declining sales and an economy that refuses to bounce back.
Joining Quiznos and Sbarro, a number of retailers have announced a retrenchment for 2014. Such companies as Sears, JC Penny, Macy's, RadioShack, Blackberry, Barnes & Noble, Best Buy, and Staples have all announced a scaling back of operations.