California Pizza Kitchen files for bankruptcy, will close unprofitable locations

By Jordan Valinsky | CNN Business

California Pizza Kitchen is the latest fast casual chain to file for bankruptcy as the pandemic and its debt burden hampers its operations.

The 35-year-old pizza chain filed for Chapter 11 Thursday, explaining that the process will help it “reduce its long-term debt load, and quickly emerge from bankruptcy as a much stronger company.” It warned that it will close unprofitable locations, but didn’t say how many of its 200 global restaurants will be affected.

“The unprecedented impact of Covid-19 on our operations certainly created additional challenges, but this agreement from our lenders demonstrates their commitment to CPK’s viability as an ongoing business,” CEO Jim Hyatt said in a release.

CPK secured nearly $47 million in new financing to ensure operations continue normally. It has around $13 million cash on hand and hasn’t paid rent for the past several months on a majority of its locations.

The temporary closure of indoor dining has also been brutal for the company, because on-premise dining makes up 80% of its sales, the company said in a filing. Revenues are currently down 40% compared to the same time a year ago, it said.