Down Go Malls, Down Goes Sbarro

Your News Companion by Ben Mathis-Lilley
March 10 2014 7:40 PM

Sbarro Files for Bankruptcy, Blames Declining American Malls

111515154-customers-order-lunch-at-a-sbarro-restaurant-on-april-4
Customers order lunch at a Sbarro restaurant on April 4, 2011 in Chicago, Illinois.

Photo by Scott Olson/Getty Images

As mall rats move online and so-called anchor department stores like Macy’s, Sears, and J.C. Penney struggle to climb out of the recession, food court establishments are hanging on for dear life. The latest casualty? Sbarro. The pizza chain today filed for bankruptcy protection for the second time in three years.

The New York-based company, which is set to close 155 of its 400 locations nationwide, says “an unprecedented decline” in traffic at America’s malls is hurting its business. Emptying malls have also put the squeeze on Hot Dog on a Stick, which filed for bankruptcy just last month, and retailers like Abercrombie & Fitch, Wet Seal, and RadioShack.

According to real estate analytics firm Green Street Advisors, about 15 percent of U.S. malls will fail or be converted into non-retail space within the next 10 years. But for some, these companies are something other than victims of circumstance. Via Reuters:

"Sbarro has been stuck with an outdated business model," said Michael Whiteman, a restaurant consultant and president of Baum & Whiteman LLC in Brooklyn, New York. "Its biggest shortcoming is that it sells food that has been sitting out for a while.”
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