This Massive Pizza Chain Has Actually Survived Bankruptcy Twice

It was a near-universal experience for '80s and '90s kids in the suburbs. You'd been bopping around the mall, working up an appetite while trying all the massage chairs in Brookstone and staring at the lava lamps in Spencer's, it was time to hit up the food court. More specifically, Sbarro. But the heyday of the food court pizza chain, which actually started as an authentic Italian grocery store in Brooklyn in 1956, has passed. Sbarro survived bankruptcy twice in its long history, and while it's still kicking, it's not as ubiquitous as it once was.

The company first filed for Chapter 11 bankruptcy in 2011 after being hit hard by the Great Recession. The recession not only affected the price of goods but also the way people shopped; mall culture just wasn't what it used to be. The bankruptcy filing was part of a massive reorganization effort that would allow the company to reduce its debt by $195 million, per The New York Times.

"Sbarro intends to emerge expeditiously from Chapter 11 as a stronger, well capitalized and more competitive company," the company said in the filing. Sbarro emerges from the first round of bankruptcy in November 2011, and things were looking promising. There was a new CEO, Jim Greco, who had a proven track record of saving other struggling restaurant chains from financial insecurity. For months, the chain's restructuring plan seemed to be going smoothly. But that wouldn't last long.

Greco spearheaded the effort to rebrand Sbarro as a fast-casual Italian eatery, which included an improved pizza recipe and a pasta station with customizable options. We've seen many mall food court restaurants that quietly disappeared and even other pizza chain restaurants filing for bankruptcy because they weren't able to change with the times, but Sbarro was determined not to let that happen.

However, just three years after its first filing, the pizza chain filed for bankruptcy again. This time, the company had between $100 million and $500 million in assets and liabilities. It moved its headquarters from Melville, New York, to Columbus, Ohio, in an effort to save funds, and it closed 155 of its 400 U.S.-based restaurants, though it still operated more than 800 around the world, meaning it's still an incredibly popular pizza chain.

While Sbarro faced a lot of trouble, the reorganization it undertook with the 2014 bankruptcy filing seemed to help the company turn a real corner after years of strife. Much of it was due to the company's willingness to adapt when its first rebrand didn't exactly pay off. CEO David Karam told QSR in 2022, "We knew that there was a limited development potential in the mall venues, and that's where we started to push harder into convenience stores and travel centers, casinos, and colleges and places where there was high foot traffic, and thank God it's worked."