Restaurant chain Ruby Tuesday files for bankruptcy

The company also shared in a court filing that it will be permanently closing 185 locations as it continues to feel the effects of the pandemic.
/ Source: TODAY

Ruby Tuesday announced it filed for Chapter 11 bankruptcy protection on Wednesday, becoming the latest large chain to feel the effects of a pandemic that has devastated the restaurant industry.

The company said in its statement that it has reached an understanding with its secured lenders to support restructuring through financing to provide a sustainable path forward.

Ruby Tuesday is the latest large restaurant chain to file for Chapter 11 bankruptcy protection during the pandemic. Bloomberg via Getty Images

Watch TODAY All Day! Get the best news, information and inspiration from TODAY, all day long.

"This announcement does not mean ‘Goodbye, Ruby Tuesday,'" CEO Shawn Lederman said in the news release. "Today’s actions will allow us an opportunity to reposition the company for long-term stability as we recover from the unprecedented impact of COVID-19."

Lederman also disclosed in a court filing that the company will permanently close 185 restaurants that had already been shuttered due to the pandemic, according to USA Today.

Ruby Tuesday, which was founded in 1972, previously closed at least 118 stores from 2017 through 2019, and the chain’s U.S. sales dropped by 13% to $721 million in 2018, according to consulting and research firm Technomic Inc. With the most recent round of closures, the chain will have 236 remaining locations.

Ruby Tuesday is only the latest big chain to feel the effects of social distancing, limited capacity, restrictions on indoor dining and temporary closures related to the pandemic. The parent company of Chuck E. Cheese announced in June that it was filing for Chapter 11 bankruptcy, which was followed by California Pizza Kitchen filing for bankruptcy in July.

Luby's, the parent company of Fuddruckers, announced last month that it will be liquidating all of the burger chain's businesses.

Denny's, Steak and Shake, Pizza Hut, TGI Friday's and several other casual restaurant chains have also announced a host of permanent store closures.

The restaurant industry has been walloped at all levels since the start of the pandemic in March, with a survey released by the National Restaurant Association last month finding that 100,000 U.S. restaurants have closed on a permanent or long-term basis, which is nearly 1 in 6 restaurants in the country. The closures have also left nearly 3 million restaurant employees out of work.