Pinstripes is down to eight locations from a peak of 18. | Photo: Shutterstock.
Pinstripes, the heavily-indebted bowling-centric “eatertainment” chain, filed for bankruptcy this week and will seek a buyer in an auction.
The company has a “stalking horse” bid from one of its lenders worth $16.6 million, most of which will be in the form of converted debt, according to bankruptcy court documents.
“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,” the company said in court documents.
A bankruptcy filing at the Northbrook, Illinois-based company has been a possibility for months. The company was delisted from the New York Stock Exchange in March over a low market capitalization—just one year after it went public in a reverse merger with a SPAC, or special purpose acquisition company.
That also came when the company received a $7.5 million loan to fund operations. And it came just a few months after the company warned of staff cutbacks.
Pinstripes was founded in 2007 and pairs bowling and bocce with food. The company at one point expanded to 18 locations but currently operates just eight. Those locations average 26,000 to 38,000 square feet and get about 80% of their revenue from food and beverages.
The company relies heavily on debt and has $143 million in secured debt from a variety of lenders, according to court documents.
Pinstripes said that the bankruptcy filing was “over a year in the making” and cited a variety of challenges that led to the event. The company in particular cited the rising cost of food and labor.
The company raised prices to offset those cost increases, but a more value-conscious consumer cut back on dining and reduced visits. All that hurt sales, which drained the company of liquidity.
Ultimately, Pinstripes’ revenue and profitability were not enough to fund its debt obligations as well as working capital and capital expenses. The company began receiving default notices from lenders earlier this year, leading to a series of forbearance agreements.
Pinstripes in January hired Piper Sandler as a financial advisor and investment banker to possibly find a buyer and later hired restructuring advisors before ultimately deciding to file for Chapter 11 debt protection.
Silverview, one of the company’s lenders, has agreed to a “stalking horse” bid, meaning an initial bid used for an auction. That bid includes $15 million in converted debt plus $1.6 million in cash. Lenders have also agreed to provide financing to keep Pinstripes operating through the bankruptcy process.
Pinstripes is hardly the only food-and-games chain struggling with weak sales. Brands such as Dave & Buster’s and Topgolf have struggled with weak sales over the past couple of years as consumers cut back on their spending.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.
