Gastropub chain Bar Louie Restaurants filed for Chapter 11 bankruptcy on Monday and announced it has closed 38 corporate-owned restaurants across the country.
But the Addison, Texas-based chain’s two Indianapolis-area locations are franchises and are not on the closure list.
Employees at the Bar Louie in The Olivia building in Carmel, 1111 W. Main St., and at the Bar Louie at Greenwood Park Mall told IBJ there are no plans to close the restaurants.
The Carmel location opened in late 2017 and the Greenwood restaurant opened in 2015. Both are operated by Louis Enterprises LLC, a franchise ownership group that includes Frank Sweeney, Andy Knapick, Mike Knapick and Scott Muench. The partners also opened a Mishawaka Bar Louie in 2008.
In seeking bankruptcy protection, Bar Louie cited reduced foot traffic at numerous locations for some of its problems. The restaurants that closed are all underperforming, it said.
Opening new Bar Louie locations over the last few years helped increase sales, but the growth was funded by debt that has restricted the company’s liquidity, according to a declaration from Chief Restructuring Officer Howard Meitiner.
Without sufficient cash to fund store refreshes and equipment maintenance, the brand experience was inconsistent across locations, Meitiner said.
“This inconsistent brand experience, coupled with increased competition and the general decline in customer traffic visiting traditional shopping locations and malls, resulted in less traffic at the company’s locations proximate to shopping locations and malls,” Meitiner said in the declaration.
Of Bar Louie’s 110 locations, 38 have “seen their sales and profits decline at an accelerating pace” since the company underwent a strategic review in 2018. Those 38 stores experienced a same-store sales decline of 10.9% in 2019, and were closed shortly before the bankruptcy filing, according to Meitiner.
Lenders are providing a loan of as much as $22 million to keep the company operating in bankruptcy. BLH Acquisition Co. is the stalking-horse bidder for the assets of the company, according to court papers.
A spokeswoman for Bar Louie didn’t immediately respond to requests for comment. An ABRH spokesman referred to the company’s press release.