Iconic sandwich chain files for bankruptcy after suddenly closing five stores – as CEO shares ominous warning
A day after abruptly closing five of their locations, the owners of a well-known sandwich brand have declared bankruptcy.
The CEO of Eegee Schiefs cautioned that the company’s restructuring could take a lengthy period.
The chain’s interim CEO, Chris Westcott, told the Arizona Daily Start that it might take up to six months for it to come out of bankruptcy.
He disclosed that since the epidemic, the chain, which was established in the 1970s, had been having difficulties.
The business is trying to pay off debt totaling about $2.8 million.
According to bankruptcy records obtained by KOLD-TV, a CBS affiliate, the chain owes Sysco, a supplier, almost $1.2 million.
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On top of that amount, Eegee’s is being charged 10% interest.
According to KOLD, the business owes other vendors hundreds of thousands of dollars.
The closures cost the frozen fruit drink brand Eegee’s a sixth of its outlets in Arizona.
One store has closed in Phoenix, and four have closed in Tucson.
There are currently four locations in Phoenix and twenty-one in Tucson.
Drive-thrus have been posted with notices alerting patrons to the closures.
Iconic convenience store closing third location in US city this year – note on door sparked ominous warning for shoppers
Additionally, devoted clients have been let down.
Some customers described how they had been going to certain stores for decades.
According to Jeff Miller, he spent at least 30 years visiting the Tanque Verde site, which is northeast of Tucson, according to KOLD.
“I have two grown sons, and I remember going through the drive-through or the dining area a lot after soccer games and swim meets. I’m not sure how long that store has been there,” he added.
Miller said he and his wife went to the business the day before it closed.
US braces for ‘45,000 store closures’
Experts have warned that in the next five years, about 45,000 physical stores may shut.
In recent years, a number of large retailers have announced shop closures or completely shut down their operations.
Chains including Mitchell Gold + Bob Williams, Shore City, Tuesday Morning, Sally Beauty, Foot Locker, and Z Gallerie have all closed.
Bed Bath & Beyond is now only an online retailer after closing all of its physical locations.
Since the beginning of 2019, the retailers most impacted have been those selling apparel, consumer electronics, sporting goods, hobbies, books, music, and home furnishings.
According to UBS, there will be 45k fewer retail locations overall—from 958k to 913k.
According to the paper, certain establishments should prosper while others should suffer.
Retailers like Target, Walmart, Costco, and Home Depot might be among the winners, it added.
Others disclosed that they used to visit the sites during their lunch break.
“I was here just a few weeks ago, and everything seemed normal,” Oscar Angulo, a frequent customer, told KOLD.
According to an Xpost, the chain claims to be dedicated to creating a stronger future in spite of the closures.
Bosses acknowledged that leaving an area is never easy.
However, the business has made an effort to give diners hope.
According to the statement, the closures will boost our capacity to expand Eegee’s reach into new towns and enable us to make more investments in our local businesses.
We can’t wait to serve our customers at all of our locations in the area.
Bosses also boasted about record sales and hinted at potential new sites in the note.
However, the business recognized that change is never simple.
Eegee has been contacted by the U.S. Sun for comment.
Store closures have occurred at other chains besides Eegee’s.
According to the U.S. Sun, two Wendy’s stores in Ohio have shuttered their doors for good.
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Michaels, a well-known craft retailer, is closing one of its locations in Connecticut.
Additionally, after 20 years, a Kohl’s store in Herdon, Virginia, will close its doors in January of next year.
How does bankruptcy work?
A certain legal procedure called bankruptcy assists businesses in getting rid of debt they are unable to pay back.
Businesses can start over and obtain new credit through the process.
According to Investopedia, bankruptcies, which are overseen by federal courts, make it easier for a business to sell off its assets in order to satisfy its creditors.
Restructuring a firm with the intention of staying open, even if it means selling off the majority of the company’s assets, is accomplished through Chapter 11, a regular procedure for businesses.
In contrast, Chapter 7 puts a business out of business by selling all of its assets.
In contrast, Chapter 15 permits cooperation between U.S. and foreign courts to handle bankruptcy cases involving “parties of interest involving more than one country,” according to the U.S. Courts.
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