Sbarro Pizza Bankruptcy: Fast-Dropping Popularity Of Malls Slams Chain’s Bottom Line

Sbarro Pizza, the 58-year-old chain of pizza joints that lets mall shoppers and airline travelers stuff themselves on oversize sliced of New York style pizza and other Italian fare, has filed for bankruptcy protection — again.

The Sbarro pizza company was still digging its way out of debt after a 2011 bankruptcy, but still has somewhere between $100 million and $500 million worth of red ink on its ledger.

Perhaps the most severe problem Sbarro Pizza has to deal with is one the company can do very little to fix, no matter how many times it files Chapter 11. People just don’t shop in malls anymore — at least not the way they used to. A large number of Sbarro outlets were situated in mall food courts where consumers making a day of it could take a break from stuffing shopping bags to stuffing their faces.

But this is no longer the ’80s and the mall is not a destination spot the way it was. That means, not as many hungry shoppers. Sbarro has dealt with that problem by announcing the closing of 155 of its stores, but opening locations overseas.

These days, consumers are much more likely to stay home and shop in the virtual mall they find on line. Sbarro is far from the only mall-dependent retailer to suffer wounds from the fast-sliding popularity of mall shopping and the move to internet shopping. Radio Shack, Macy’s and J.C, Penney have all closed stores recently.

In the food sector, Sbarro joins Bennigan’s, Steak & Ale and Pizzeria Uno in the bankruptcy court queue.

Other than the sharp reduction in mall shopping, food consumers have become more sophisticated, preferring trendier fast food — or “fast casual” — outlets such as the Mexican food chain Chipotle and the soup and sandwich seller Panera Bread.

“Sbarro has been stuck with an outdated business model,” said restaurant consultant Michael Whiteman. “Its biggest shortcoming is that it sells food that has been sitting out for a while, and more people want food made to order.”

When Sbarro filed for bankruptcy in April of 2011, it emerged in November of that year. The company says it expects its 2014 bankruptcy to be quick as well.

“The board and senior management team are committed to ensuring Sbarro’s future growth and success and today’s filing is a necessary step,” said Sbarro CEO David Karam, who has been running the pizza company for just a year, after leaving his post as president of Wendy’s.