Bennigan’s Files For Bankruptcy – Michigan Locations Safe

29 07 2008

Bennigan’s becomes the first casual dining restaurant casualty of the weakend economy.  Parent company Metromedia Restaurant group filed for Chapter 7 bankruptcy protection today in the Eastern District of Texas. 

All restaurants have been struggling as consumers cut back on discretionary spending to better deal with high gas prices, the weak housing market and inflation. The hardest hit have been casual dining chains and bar and grill restaurants, which charge higher prices than fast food and other quick-service chains.

Bar and grill restaurants have also suffered from intense competition. Morningstar analyst John Owens said several chains expanded quickly, making it more difficult for customers to differentiate between them and forcing many companies to cut prices to lure diners.

“Bennigan’s was the weakest of the major players,” Owens said.

Meanwhile, commodity costs have soared, forcing chains to either raise menu prices or see profits plunge.

Even though the parent company is closing most stores, the Mid-Michigan stores will not be closing.  The stores are not owned by Metromedia.  They are owned privately by LaBelle Management.  LaBelle has bought the rights to use the Bennigan’s name and menu.  The bankruptcy filing by Metromedia will put more pressure on LaBelle in regards to advertising and supply, but customers shouldn’t see a difference.  The following press release was sent out this morning by LaBelle Management. Read the rest of this entry »