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latimes.com

Italian restaurant chain Sbarro to close 155 outlets in North America

Bloomberg News

5:47 PM PST, February 19, 2014

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Sbarro, the Italian restaurant chain that's a fixture in mall food courts, is closing 155 of its locations in North America.

The move is part of a broader plan to boost financial performance under a new management team, the company said Wednesday. The closings affect underperforming company-owned stores and not franchise locations, Sbarro said.

The chain, based in Melville, N.Y., is still trying to rebound after emerging from bankruptcy in 2011. Sbarro's restaurants are concentrated in malls, where slowing traffic and muted consumer spending has taken a toll on food courts. Even as it scales back operations in its home country, the company added South American locations last year.

"Despite the closures announced today, Sbarro remains a vibrant and growing brand with more than 800 stores worldwide, including 81 that were opened in 2013," the company said.

The move follows a bankruptcy filing by HDOS Enterprises, the owner of Hot Dog on a Stick — another restaurant commonly found in shopping malls. That chain "signed some very expensive leases during the booming economy of the mid-2000s," HDOS Chief Executive Officer Dan Smith said this month. Hot Dog on a Stick also suffered from a decline in mall foot traffic.

Founded in 1956 by the Sbarro family, the chain expanded its pizza empire over the decades to more than 40 countries. MidOcean Partners, a New York private-equity firm, acquired the closely held business in 2007 for $417 million. Then came the recession, which meant fewer consumers visiting shopping malls and eating at food courts.