Yogurt Parlor Franchiser Files for Chapter 11
Penguin’s Place Inc., a Thousand Oaks-based franchiser of frozen yogurt parlors, has filed for Chapter 11 bankruptcy.
In seeking protection from creditors, the privately held firm cited an industrywide slump brought on by changing buying habits, the recession and an unseasonably cool summer.
The firm said Monday that it tentatively plans to close two of its five company-owned stores but that it does not anticipate any layoffs among its 31 corporate employees.
The filing in U.S. Bankruptcy Court in Los Angeles does not affect operations at Penguin’s 118 franchises, said newly appointed President Stephen Van Velkinburgh. A former executive of Haagen-Dazs Co., he was hired last week to oversee the development of a reorganization plan. He succeeded Ben Silloway Jr., who has taken an unspecified post at Zausner Foods Corp., Penguin’s New Holland, Pa.-based parent.
In its petition to the bankruptcy court, Penguin estimated its assets at $2 million and liabilities at $6.1 million.
Van Velkinburgh said Penguin’s sales have been steadily declining since their peak in mid-1987. Sales from all stores, including franchises, dropped 9% to $29 million last year from $32 million in 1989, Van Velkinburgh said. He estimated that sales this year will drop 10% from last year’s total, to about $26 million.
Van Velkinburgh said the company plans to cut costs by renegotiating store leases and streamlining its advertising to include more direct mail and fewer ads in print media.
He said Penguin’s also plans to broaden its menu of yogurt flavors and toppings. The restructuring is expected to be completed by the end of March, 1992, he said.
Like its competitors, Penguin’s has suffered in recent years as frozen yogurt has begun showing up in supermarkets and fast-food chains.