Chuck E. Cheese is on the verge of bankruptcy and may have to close all of its locations — for good
It looks like Chuck E. Cheese has been added to the growing list of businesses irreparably impacted by COVID-19. As one can imagine, it’s been difficult for Chuck E. Cheese‘s parent company, CEC Entertainment, to remain financially afloat during the months of quarantine. Because Chuck E. Cheese’s business model heavily depends on customers visiting not only for the food but also the entertainment as well, the restaurant didn’t fare well when all non-essential businesses were ordered to close. CEC has even reportedly asked lenders to provide a $200 million loan to keep the company from going bankrupt.
It gets worse.
CEC Entertainment is already nearly $1 billion in debt, according to The Wall Street Journal reports. Although Chuck E. Cheese saw a 2.7 percent increase in sales (after two years of declining or stagnant revenue), revenue drastically fell by 94 percent in the first week of quarantine, according to QSR. And although the chain pivoted to delivery and carryout (Chuck E. Cheese became “Pasqually’s Pizza and Wings” on delivery apps — a nod to one of Chuck’s bandmates), this shift was seemingly not substantial enough.
Per QSR, CEC furloughed the majority of its hourly staff and 65 percent of its support center employees, while also having rent suspended. CEC currently owes $1.9 million on their quarterly loan payment. And with 56 percent of revenue coming from merchandise and entertainment, according to Mashed, it’s unclear how the business will survive, even with a new takeout strategy in place.
Interestingly, it was also noted in the Wall Street Journal that CEC will still give retention bonuses to its top executives. CEO David McKillips will receive $1.3 million, president J. Roger Cardinale will receive $900,000, and EVP and CFO James Howell will get $675,000.
Are we ready to say goodbye to Chuck? However you might feel about Chuck E. Cheese, it’s been a kids’ birthday party staple for awhile (it’s been around since the late ’70s), and if you add a generous dash of red pepper flakes to the pizza, it’s not even that bad.
Some fans are taking to Twitter to express their concern.
Some folks aren’t too bent out of shape about it, though.
One Twitter user wrote, “Chuck E. Cheese going bankrupt and I can’t believe it lasted this long,” while another one commented, “We cannot be sad about Chuck E Cheese potentially going bankrupt – first off, gambling for kids. Second, the pizza conspiracy. Third, this guy….”
No matter what opinion you have about Chuck E. Cheese’s fate, you have to admit that it at least feels a little weird we may have to say farewell for good to that iconic mouse.