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The Way the Cookie Crumbles
Rising commodity prices and slumping sales have struck a favorite of mall rats across America. Mrs. Fields Famous Brands, purveyors of Mrs. Fields Cookies and TCBY frozen yogurt, has announced that it is planning to seek Chapter 11 bankruptcy protection.
A sell-off last year of its other brands--Pretzel Time, Pretzelmaker, and Great American Cookies--to NexCen Brands Inc. for $100 million in cash and stocks apparently didn't bring enough relief. The company, which licenses and franchises 1,200 Mrs. Fields and TCBY stores around the world, has about $196 million in publicly traded debt.
Now it's seeking protection under a prepackaged bankruptcy plan while it reorganizes with the help of equity sponsor Capricorn Investors III LP, who brokered the NexCen deals. Blackstone Advisory Services has also been brought on to look into a possible sale of major frozen yogurt chain, TCBY.
The company has until August 25 to file for bankruptcy under the prepackaged deal.
With commodity prices rising and consumers focusing on necessities, that's just the way the cookie has been crumbling for snack outlets and restaurant chains. Just this year, Old Country Buffet, owner of Old Country Buffet and Ryan's steakhouses, filed for Chapter 11 in January while in July, the owner of Bennigan's and Steak & Ale, S&A Restaurant Corp, filed for Chapter 7 liquidation.
Andrea Chalupa
