Hooters reportedly prepares for Bankruptcy as U.S. Chains Struggle to Adapt Consumer Tastes -

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February 21, USA: Hooters, the iconic “breastaurant” chain, is reportedly preparing to file for bankruptcy, according to a Bloomberg report citing sources familiar with the situation. The company has engaged law firm Ropes & Gray to handle the filing, though neither Hooters nor the law firm have commented publicly. This move comes after years of financial struggles, with Hooters reportedly grappling with $300 million in debt and declining revenue, as per reports in September 2024.

In the summer of 2024, Hooters closed numerous underperforming stores across the U.S. The company cited these closures as a necessary step, focusing on its frozen food line launched in June 2024, and plans for expansion into new markets. Despite these efforts, Hooters has faced increasing competition and a shift in consumer preferences that has impacted its once-popular brand.

Hooters is not alone in facing these challenges. Major American chains like Red Lobster and TGI Friday’s have also filed for bankruptcy and closed locations in recent years. The shifting preferences of American diners, coupled with changing spending habits, have forced many iconic chains to rethink their business models. However, the rise of competing “breastaurant” chains, such as Bikini Beans, Tilted Kilt, and Twin Peaks, suggests that while Hooters may be struggling, the concept itself is not entirely out of favor. Twin Peaks, in particular, has experienced rapid growth and is now valued at $1.2 billion.

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Hooters, which has been around for over 40 years, has tried to adapt to modern demands. In 2017, the chain launched Hoots, a fast-casual offshoot that offered a more family-friendly environment with less revealing uniforms. This move was an attempt to appeal to a broader audience, including millennials who might otherwise avoid the traditional Hooters experience. Despite this, the Hoots concept has failed to gain significant traction, with the last location closing in Atlanta in the summer of 2024, leaving only three remaining.

If Hooters does file for bankruptcy, it will mark another chapter in the decline of classic American chains struggling to compete with newer, more contemporary dining concepts. For those loyal to Hooters’ signature wings, they may now have to turn to competitors like Wingstop or the many other chicken-centric chains that have surged in popularity in recent years. The future of Hooters remains uncertain, but its troubles reflect a broader trend facing many once-popular chains across the country.