Iconic Joe’s Crab Shack to file for BANKRUPTCY

The restaurant economy is slowly collapsing. According to this Bloomberg report Joe’s Crab shack is preparing to file for BANKRUPTCY.

The operator of the Joe’s Crab Shack and Brick House Tavern restaurant chains is preparing to file for bankruptcy, according to people familiar with the matter.

Ignite Restaurant Group Inc. could file as soon as next week, said the people, who asked not to be identified because the process isn’t public. In early April, the company announced it was pursuing options including a possible sale with financial adviser Piper Jaffray Cos. Both strategic and private equity buyers are considering purchasing the company out of bankruptcy, according to one of the people.

The dining sector has been facing drops in customer traffic, and Ignite reported declining sales in the most recent quarter, with comparable-restaurant revenue falling by 6.8 percent. The company’s debt totals about $121 million, including $112 million on a term loan set to mature in 2019, according to data compiled by Bloomberg. Chief Executive Officer Robert S. Merritt resigned last month.

As of January, Houston-based Ignite operated 112 Crab Shacks and 25 Brick House Taverns.