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Friendly’s shuts 37 more eateries, exits bankruptcy

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January 10, 2012|By Jenn Abelson

Friendlys emerged from bankruptcy yesterday. It has closed about 100 restaurants. (Joanne Rathe/Globe Staff/File…)

Friendly Ice Cream Corp. closed another 37 stores this week, including 10 in Massachusetts, before emerging from bankruptcy protection yesterday.

The Wilbraham chain has shuttered about 40 percent of its locations in Massachusetts and 20 percent overall - about 100 restaurants in total - since filing for Chapter 11 protection in October.

The most recent closings will result in an estimated 780 people losing their jobs, about 20 at each restaurant, Friendly’s said. They include shops in Bedford, Great Barrington, Holyoke, Mansfield, Shrewsbury, Springfield, and Westborough.

Friendly’s, which is owned by the private equity firm Sun Capital Partners, said in a news release that it tried to work out more favorable lease arrangements at locations where it believed rents did not reflect market conditions, making it difficult to keep operating the restaurants.

The company said it restructured leases for some sites but could not reach agreements with landlords for 37 restaurants and decided to shut down the locations at the close of business on Sunday.

“We regret that this decision has become necessary, and we appreciate the hard work and dedication of the Friendly’s employees at each of the affected locations,’’ Harsha V. Agadi, Friendly’s chief executive, said in a statement.

“We intend to accommodate as many as possible from closed locations to nearby operating restaurants, where available.’’

The chain filed for bankruptcy protection in Delaware in October, saying it was a victim of a difficult economy, high supply costs, and changing customer tastes. Friendly’s was founded by Prestley and Curtis Blake, brothers who started a neighborhood ice cream shop in Springfield during the Great Depression in 1935. Sun Capital, a Florida buyout firm, acquired the chain in 2007 for about $337.2 million.

Since entering Chapter 11, Friendly’s said, it has tried to implement a turnaround plan, including by enhancing the menu and speed of service. Agadi said in the fall that the company was planning to introduce a new store concept this spring in Springfield with a trendier look, iPads for order-taking, and a focus on healthier foods.

Friendly’s canceled an auction last month because it had not received any bids to compete with the $75 million offer made by the Sun Capital affiliate, Friendly Ice Cream LLC.

Restructuring “in just over three months is a significant accomplishment,’’ Agadi said in a statement. “As a now better capitalized company, more able to compete in the casual family restaurant sector, we look forward to building on Friendly’s rich 76-year-old history.’’