Planet Hollywood has closed nine of its 32 U.S. movie-theme restaurants ahead of a planned Chapter 11 bankruptcy filing. Like a poorly managed Hollywood film bloated with mediocre stars, the company has become unprofitable.
The Orlando-based company plans to file bankruptcy petitions Tuesday in Delaware, and will soon submit its reorganization plan, the company said in a news release Monday evening.
"Today is the first step in our plan to position Planet Hollywood for a return to long-term profitability and healthy growth," said Robert Earl, chairman and chief executive officer.
The restaurants closed Monday were in Chicago, Costa Mesa, California; Fort Lauderdale, Florida; Gurnee, Illinois; Houston; Indianapolis; Maui, Hawaii; Miami and Phoenix.
There may still be a couple of additional closings or franchise conversions, the company said. The company's restructuring plan also calls for upgrading several of its movie-theme restaurants and menus, Earl said.
As part of the reorganization, Planet Hollywood International Inc.'s two largest shareholders and a trust for Earl's children have agreed to provide $30 million cash infusion to help keep the international chain of glitzy restaurants going.
The planned bankruptcy filing is the latest setback for the operator of nearly 80 Planet Hollywood restaurants. The company also owns several sports-theme All-Star Cafes.
Former president William Baumhauer resigned in June, just three months after the company's co-founder resigned his board position. Keith Barish, who started the venture with Earl and actors Sylvester Stallone, Demi Moore, Arnold Schwarzenegger and Bruce Willis, left the company in March.
The company has been trying to cut operating costs by reducing corporate overhead, putting in cost-control systems, streamlining store-level operations and disposing of nonessential corporate assets.
Despite those moves, analysts have said that aggressive expansion and increased competition have hurt the company.