The prognosis for Dave & Buster’s Entertainment Inc., a chain of entertainment centers that offer food, drinks and arcade games, looked increasingly dire this week as the coronavirus economy took a massive bite out of revenue and the company looked to lay off hundreds of workers.
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The company warned Wednesday that it may need to file for bankruptcy if it can’t reach a deal with its lenders amid the coronavirus’ squeeze on the industry, the Wall Street Journal reported.
That’s after Dave & Buster’s second-quarter revenue plummeted an eye-popping 85 percent this year compared to last, the company announced last Friday – falling from $344.6 million in 2019 to just $50.8 million.
In the first quarter, revenues were down to $159.8 million in 2020 from $363.6 million last year.
The chain also plans to lay off more than 1,300 employees across seven states, Restaurant Business Online, a trade publication, reported Wednesday. D&B will reportedly try and rehire workers from that pool once it is allowed to expand its reopening.
The company reached a short-term debt-relief deal with its lenders until Nov. 1, according to the WSJ report, but if that isn’t extended the chain is warning that it may need to file for bankruptcy.
The parent company of Chuck E. Cheese, a similar entertainment venture that’s marketed to children rather than the above-21 crowd, has already filed for bankruptcy due to pressures on the industry related to the coronavirus, according to the report. So has Apex Parks Group LLC, an amusement-park company.
With many of D&B’s locations shuttered for months because of COVID-19 shutdowns and health precautions, the company said it had reopened 89 of its 137 stores as of Sept. 9. They were operating under reduced hours and capacity limitations tailored to the local rules governing each facility.
Each location is also offering an abridged food and beverage menu and has implemented additional cleaning procedures.