Buffets Inc. is stepping out of bankruptcy with $50 million in exit financing and big plans to woo back the diners it lost in recent years.
Its first step: Add steak for dinner every night at every restaurant.
The Eagan-based restaurant chain, one of the country's largest all-you-can-eat buffet restaurant operators, filed for Chapter 11 bankruptcy protection in January. It was Buffets' second bankruptcy since 2008 as it has battled a weak economy, competition from fast-casual restaurants and a supersized helping of debt rooted in its purchase by private equity investors in 2000.
On Thursday, Buffets said it's out of bankruptcy and owned by its pre-petition lenders. According to court documents, investment banking giant Credit Suisse was a major secured creditor.
The company, which operates the Old Country Buffet and Ryan's chains among others, used bankruptcy protection to carve off nearly $300 million in debt and interest payments and close 140 underperforming restaurants, about a quarter of its total restaurants.
Some of the $50 million in exit financing will go to address deferred maintenance and finance an extensive training program for its 18,000 employees, the company said. Buffets expects to renovate at least 35 restaurants by next June, and at least 50 in each fiscal year as it moves to update its brand.
Jason Abelkop, the company's new chief marketing officer, said in an interview that Buffets has been scrutinizing operations from its food offerings to the grills and the carpeting.
One problem it found, he said, was that only about half its restaurants regularly offered steak. So about two weeks ago it rolled out its "Rancher's Select Sirloin," which will be served in every restaurant for dinner seven nights a week.
