The owner of the Fox & Hound sports bars and restaurants filed for Chapter 11 bankruptcy protection in Delaware, citing a slump in sales since the recession and rising commodity prices.
F&H Acquisition Corp., based in Wichita, Kan., operates about 101 restaurants in 27 states under the Fox & Hound, Champps and Bailey’s Sports Grille names.
The first Fox & Hound opened in Arlington in 1994, and the company has six restaurants in North Texas: two Fox & Hounds in Fort Worth, one in Arlington, one in Dallas and one in Richardson, and a Champps in Irving.
The area restaurants will remain open as the company restructures its finances, spokesman Rick Van Warner said.
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In its bankruptcy petition, filed Sunday, the company said its revenues decreased 5 percent in the first nine months of 2013, to $218.8 million, and same-store sales declined 3.1 percent in the first 11 months of the year.
The company, which was taken private in 2006 by investors led by Newcastle Partners of Dallas, listed outstanding debt of $119 million. Among the top creditors listed in the filing is food distributor Ben E. Keith Co. of Fort Worth, owed $192,164.47.
“The recession has been a primary factor in the decline in the debtors’ sales, as consumers prioritized the savings of dining at home over eating out,” according to a court document filed by James Zielke, chief financial officer of F&H.
“With overall unemployment rates at historically high levels, discretionary income for customers has been severely constrained.”
Zielke also said the rising cost of food, particularly for cheese and meats, adversely affected results, prompting the company to raise prices and reduce costs, including cutting staff and freezing wages.
A Fox & Hound in Lewisville was among restaurants closed in the past year.
F&H began facing financial difficulties about a year ago, when it defaulted on one of its credit agreements. The company hired a new CEO in January and then engaged a firm to find a buyer for the business.
Despite discussions with many parties, F&H could not land a “stalking horse bidder,” which would set a minimum price for a court-supervised auction.