How California Pizza Kitchen Survived Bankruptcy And Came Out On The Other Side

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In 2020, the COVID-19 pandemic drastically reshaped the restaurant industry. Many places had to close overnight, losing their biggest source of income from dine-in customers. Though many quickly pivoted towards a delivery-and-takeout type of operation, the rapid loss of revenue still spelled doom. One restaurant that hit a rough patch as a result of the pandemic was California Pizza Kitchen, the iconic pizza chain that popularized California-style pizza. It declared bankruptcy in July 2020, alongside many other household names, but instead of throwing in the towel, CPK became one of the few restaurant chains that survived bankruptcy.

At the chain's lowest financial point, it was reportedly over $400 million in debt. Deep in the red, the chain could do little else but file for bankruptcy — yet even as it did so, CPK was looking steadily ahead, refusing to give up. It filed for Chapter 11 bankruptcy, which allows the restaurant to stay open and arms the debtors with an approved plan for reorganizing the company's finances.

In the official press release announcing the bankruptcy, the then-CEO Jim Hyatt said, "Today's announcement is a step towards a stronger future for California Pizza Kitchen." And he wasn't wrong.

Just four months after filing for bankruptcy, CPK was already emerging on the other side. The restaurant reduced more than half of its debt by exchanging it for equity — meaning the lenders nixed some of the debt in return for shares of the company. Despite the tough year it had, California Pizza Kitchen ended 2020 on a high note, with a full-steam-ahead attitude. It promised to focus on the rollout of health-centered pizzas, prioritize global expansion, and lean further into ventures that reach beyond dine-in customers.

Another big change came two years later, in 2022, when the company got a new CEO, Jeff Warne. Under his lead, the comeback strategy became laser-focused on existing customers, because appealing to the active base is more cost-effective than searching for new customers. The restaurant began offering loyalty rewards, such as discounts and big financial prizes, to its regular visitors.

Warne has also renewed the focus on CPK's packaged products, such as its line of frozen pizzas. These are a huge revenue driver for the chain and one of the strongest pillars of its brand. Not to mention, the frozen pizzas have a wide reach, since they're sold in many grocery stores, as well as on Amazon. Grab yourself the Signature Uncured Pepperoni Frozen Pizza or the classic BBQ Chicken Frozen Pizza.