Razzoo’s Inc., which operates U.S. restaurant chain Razzoo’s Cajun Cafe, has named ThirtyThree97 LLC, the parent company, of Dallas, Texas, U.S.A.-based restaurant group M Crowd, as its stalking horse purchaser.
Addison, Texas, U.S.A.-based Razzoo’s filed for bankruptcy in October, saying it owed USD 3.1 million (EUR 2.6 million) in unsecured trade debt and USD 9.7 million (EUR 8.2 million) in secured debt, according to court filings.
Dallas, Texas-based M Crowd, which owns Mi Cocina, the Mercury, Sushi at the Mercury, and several other restaurant brands in Texas, has submitted an USD 18.8 million (EUR 16 million) credit bid, documents filed in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, said.
Razzoo’s cited increased competition in casual restaurant dining and lower crawfish prices as some of the reasons it filed for bankruptcy protection.
Additionally, the company said it experienced a decline in sales due primarily to shifting consumer preferences for convenience, affordability, delivery, and innovation "in part attributed to the impact of Covid-19 on consumer behavior, general market conditions, geopolitical and economic uncertainty,” as well as heavy media presence and discounting from competitors in the casual dining space.
“Many key competitors such as Chili’s and Applebee’s have utilized aggressive marketing and value-oriented promotions which have negatively influenced Razzoo’s guest traffic,” the company said.
Other chains in the casual dining space have also struggled this year, such as some owned by Tampa, Florida, U.S.A.-based restaurant group Bloomin’ Brands, which has continued to close restaurants in an effort to return to profitability.
The company closed 21 Outback Steakhouse, Bonefish Grill, and Carrabba's Italian Grill locations.
“Bloomin’ Brands’ closures are a continued reflection that the casual dining industry has too many stores with too many seats,” FoodServiceResults CEO Darren Tristano told SeafoodSource in November, adding that consumers are increasingly seeking independent restaurants that are more local and seasonal, whereas chains seem to turn off younger consumers “since their parents dine there and they are not designed to appeal to the younger consumer who grazes and is looking for innovative beverages and mocktails.”
