On Wednesday Ruby Tuesday announced their decision to file for Chapter 11 bankruptcy, citing the “unprecedented impact of COVID-19.”
Ruby Tuesday said it plans on utilizing the bankruptcy to strengthen its business by reducing debt. It also shared that it will continue to operate “business as usual” through the Chapter 11 reorganization process.
Ruby Tuesday’s CEO Shawn Lederman said the “complete elimination of in-store dining, which has historically represented over 90% of the Company’s total sales, struck at the heart of the Company’s business model.”
With restaurants and malls being mandated to shutter its doors during the pandemic, along with shelter-in-place orders, and self-quarantining orders “created a situation whereby the Company’s revenues dropped so substantially that it could no longer sustain its normal operating costs.”
Ruby Tuesday said they will permanently shut down the 185 restaurants it closed due to the pandemic,. but still has 236 dining rooms that are currently offering full dining services. Prior to the pandemic the company employed about 7,300 employees, most of which it were furloughed.
“This announcement does not mean ‘Goodbye, Ruby Tuesday,’” Lederman said in a news release. “With this critical step in our transformation for long-term financial health – this is ‘Hello’, to a stronger Ruby Tuesday.”