Bar Louie is a US based operator of bar and restaurant dining facilities throughout the US. Marketed as a “gastrobar,” a take on the gastropub, the Company seeks to differentiate the brand through an array of craft cocktails, an enhanced food menu offering, and a friendly and warm bar style environment. The Company’s gastrobars are located in a variety of locations, including lifestyle centers, traditional shopping malls, event locations, central business districts and other stand-alone specialty sites.
In the 7 years prior to Carl Marks Advisor’s (CMA’s) involvement, the Company embarked on an expansion initiative that saw the chain grow to ~110 corporate locations and ~24 franchise locations, with operations in 26 states and the District of Columbia. Growth was funded via a combination of free cash flow from operations and add-on debt capital.
By 2019, a large number of the locations were unprofitable. Locations within shopping malls were especially hard hit, as reduced foot traffic and changing consumer demographics eroded sales volume. Declining EBITDA and free cash flow impaired the Company’s ability to service its debt, and the lack of available funds to reinvest in Capex and marketing created a tailspin of continued declines in earnings across the operating footprint. In August 2019, with limited liquidity remaining, the decision was made to seek an independent assessment of the Company’s strategic alternatives.