Chevys, El Torito owner files for bankruptcy
This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.
The owner of Mexican restaurant chains Chevys Fresh Mex, El Torito and Acapulco filed for bankruptcy Tuesday, pressured by years of slipping sales and the country’s economic malaise, executives said.
Cypress-based RM Restaurant Holding Corp. said its revenue has fallen to $478 million last year from $553 in 2008. The company’s 178 restaurants are seeing fewer diners, according to the filing in U.S. Bankruptcy Court in Delaware.
The restaurants are in states battered by “significant increases in unemployment” and the home mortgage crisis, said Chief Financial Officer Richard P. Dutkiewicz in the filing. About 84% of the company’s locations are in California, where the purchasing and distribution facilities are also based.
Dutkiewicz added that “the recent national recession has left much of the general public less prone to spending their disposable income” and that the company “does not expect a meaningful improvement in the economy in 2011.”
A performance index calculated by the National Restaurant Assn. trade group last week fell to its lowest level in 13 months amid dipping customer traffic, the aftermath of Hurricane Irene and continued uncertainty among eatery operators.
RM’s subsidiary, purchasing and distribution service Real Mex Foods Inc., was hard hit by rising commodity prices and the loss of key contracts, the filing said. Real Mex provides Mexican food products to chains such as El Pollo Loco, Del Taco and Baja Fresh as well as retailers such as Trader Joe’s, Costco and Vons.
The company has about 11,000 employees.
-- Tiffany Hsu