'Eatertainment' Chain Pinstripes Files For Bankruptcy, Closes Most Locations
An Italian-themed bowling and dining chain filed for bankruptcy after struggling for months to attract a buyer.
In its Chapter 11 filing this week in Delaware bankruptcy court, Pinstripes Holdings said it plans to hold an auction for its remaining assets over the next 45 days in the hopes of staving off a liquidation.
The company is saddled with $143M in debt, including $115M in secured debt held by principal lender Silverview Capital Partners, according to an affidavit filed by CR3 Partners Senior Managing Director James Katchadurian, who was appointed as Pinstripes' chief restructuring officer for the bankruptcy process.
Silverview has agreed to provide $3.8M debtor-in-possession financing as part of a $15M stalking horse for Pinstripes after efforts that began in January to find a third-party buyer failed.
Pinstripes operated 18 locations as of last month, each between 26K and 38K SF, but shuttered 10 this week before it filed for bankruptcy on Tuesday. The closed venues include locations in Chicago; Fort Worth, Texas; Overland Park, Kansas; and Paramus, New Jersey, Nation’s Restaurant News reported. It will look to restructure its remaining eight leases, the filing states.
Founded by CEO Dale Schwartz in 2006, Pinstripes was part of a niche segment of the retail industry called “eatertainment,” hybrid venues combining customer experiences with food, with the best-known brands including Dave & Buster's and Topgolf.
Pinstripes went public in 2023 by merging with a special purpose acquisition company, raising $70M in stock and $50M in debt from private equity firm Oaktree Capital Management.
Its stock struggled to gain traction, and in March, the company filed to delist from the New York Stock Exchange because its value dipped below the NYSE minimum of $15M. The move came concurrently with a debt restructuring deal with Oaktree.
The company generated 80% of its $129M in annual revenues from food and beverages as of April 27, according to court documents. It failed to reach a refinancing agreement with Oaktree before the bankruptcy.
Katchadurian wrote that inflation and declining consumer spending impacted its revenues, especially with jumps in labor and commodities costs in recent years.
“As inflationary pressures have made consumers increasingly cost-conscious, preferences for out-of-home experiences began to shift to more cost-efficient alternatives,” he said in court filings. “As a result, [Pinstripes] began facing an increasingly tight liquidity crunch at the same time that they most needed cash reserves to adapt to industry-wide changes.”
The stalking horse bid sets a ground floor for the company’s potential sale to other bidders, a process that is scheduled to happen over the next few weeks.
“To be blunt, the process proposed to be consummated through these Chapter 11 cases is not perfect, and it is not where the Debtors wished they were right now,” Katchadurian said in his affidavit. “However, it is the only pathway forward that preserves value for the Debtors’ constituents and preserve the Debtors’ business as a going concern.”
